Coronavirus | Amazon Q1 profit drops 29% despite revenue surge

Amazon said on Thursday profits took a hit in the past quarter due to the global pandemic and that its earnings in current period would be wiped out by COVID-19 related expenses.

The technology and e-commerce giant said its revenues surged 26% in the quarter to more than $75 billion as people hunkered down at home due to the pandemic turned to it for supplies and entertainment.

But profits slipped 29% from a year ago to $2.5 billion.

Chief executive Jeff Bezos said all profits in the April-June quarter would be erased by expenses linked to the global virus outbreak.

“In this coming Q2, we’d expect to make some $4 billion or more in operating profit,” Bezos said.

“But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.”

Shares in the Seattle-based company slipped some five percent in after-hours trades that followed release of the earnings report.