Coronavirus: Amazon faces loss with $4bn COVID-19 spending | Business News

Amazon has said it could record its first loss in five years despite a hike in revenue as it spends at least $4bn (£3.2bn) in response to the coronavirus outbreak.

While other traditional shops have been forced to shut because of the COVID-19 lockdown, the online retailing giant recruited an extra 175,000 workers to cope with a surge in online shopping during the pandemic.

Ways of working will have to change when lockdown ends.

The process of getting back to work

In the current financial quarter, which has witnessed coronavirus lockdowns around the world, Amazon said it could see a 28% increase in revenue to $81bn (£65bn).

While in normal circumstances, the company would earn an operating profit of at least $4bn (£3.2bn) over the period its costs will rise by that amount or more so it can respond to the pandemic, Amazon said.

The money is going on employing additional staff, overtime, buying protective equipment such as masks, and disinfecting its massive warehouses where orders are packed and sent out.

The firm also has plans to test workers for COVID-19, as part of measures aimed at ensuring the business can continue to operate, amid safety concerns.

:: Listen to the Daily podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker

The company forecasts its operating income will range from a loss of $1.5bn (£1.2bn) to a profit of $1.5bn, compared to $3.1bn (£2,5bn) in the same quarter last year.

While the shares in the firm fell in response, they remain up overall by more than 10% since mid-February, while the wider stock market has sunk.

Kim Khan, US markets analyst at said: “Amazon built its commanding position by spending all its
cash to grow before it became the profit-making machine it is today.

“It’s doing the same thing during this lockdown period and will likely come out a winner again.”

Source Article

Next Post

Coronavirus trial drug Remdesivir's maker aims for wide distribution - Gilead CEO

WASHINGTON (Reuters) – Gilead Sciences (GILD.O), which manufactures remdesivir, is focused on making the experimental coronavirus drug accessible and affordable to as many people as possible once it is approved, Chief Executive Daniel O’Day said on Friday. Gilead has already said it will donate the first 1.5 million doses of […]