Amazon CEO Jeff Bezos
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Amazon is set to report its first-quarter earnings after the bell on Thursday, revealing the pandemic’s impact on the business that has been a rare bright spot on the stock market.
Wall Street is anticipating earnings per share of $6.25 on revenue of $73.61 billion, based on Refinitiv consensus estimates. Amazon Web Services revenue is expected to come in at $10.33 billion, based on FactSet estimates. However, it’s difficult to compare reported earnings to analyst estimates for Amazon’s first quarter, as the coronavirus pandemic continues to hit global economies and makes earnings impact difficult to assess.
Amazon has seen heightened demand in the first quarter as the coronavirus pandemic has forced people around the world to stay at home and rely on delivery services for most of their needs. The company has opened positions for 175,000 new workers to keep up and has had to cut slack on its typically speedy delivery times. It’s also had to contend with sellers jacking up prices on newly-popular goods like hand sanitizer and masks.
AWS has played an important role in shelter-in-place communities that are increasingly relying on online cloud services to learn and get work done. The company is offering cloud services and other assistance to the World Health Organization, CEO Jeff Bezos told shareholders in his annual letter.
Amazon has faced backlash from both workers and politicians as it has played a key role in the pandemic response. Protests have rippled across the U.S. as workers complained of unsafe conditions. One protest in New York City led to the firing of its organizer, prompting further public outrage. Amazon said the worker was fired after ignoring instructions to stay off premises following a potential Covid-19 exposure.
Amazon has taken several steps to protect and compensate workers during the pandemic, often after employee push-back. It has implemented social distancing measures, doubled overtime pay for warehouse workers and offered paid time off for part-time workers
Amazon has temporarily closed warehouse operations in France after a judge ordered the company to halt all non-essential deliveries during the pandemic or face a fine of 1 million euros per day for infractions.
Antitrust concerns around Amazon were revitalized in the past week after a new report from The Wall Street Journal found employees were able to assess data of individual sellers on its platform to inform rival private label products. Amazon has testified to Congress that it only uses aggregated data of several sellers to inform its strategy, but the Journal report said employees often could deduce individual seller info, especially when one seller made up the vast majority of sales in a category.
Amazon said it does not believe the Journal’s findings are accurate, but that they would violate its policies if true. The company has opened an internal investigation.
Lawmakers blasted the company following the report, with House Antitrust Subcommittee Chairman David Cicilline, D-R.I., claiming Amazon “may have lied to Congress” in its testimony about its private label strategy. Sen. Josh Hawley, R-Mo., asked the Department of Justice to open a criminal antitrust investigation into the business, citing the Journal report and concerns its has used “predatory and exclusionary data practices to build and maintain a monopoly.” Amazon already faces probes from the House Antitrust Subcommittee and the Federal Trade Commission, according to Bloomberg.
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