Amazon and Apple sales soar during Covid crisis

Amazon said in its previous trading update that costs associated with dealing with the coronavirus would severely impact profitability in its second quarter, but results revealed yesterday (30 July) still show it performed strongly.

Net income increased to $5.2 billion compared to $2.6 billion one year before, aided by product sales growth of almost $15 billion to £50 billion, and service sales growth of $11 billion to $38.6 billion.

CEO and founder, Jeff Bezos, described the period as “another highly unusual quarter”, with the three months to 30 June coinciding with the height of the coronavirus pandemic in many territories in which Amazon operates.

Third-party sales on Amazon again grew faster than Amazon’s first-party sales during the quarter, he explained.

“As expected, we spent over $4 billion on incremental Covid-19-related costs in the quarter,” Bezos noted, with the money spent on areas such as purchasing personal protective equipment, more cleaning, bonuses, and recruitment.

Meanwhile, Apple’s third quarter results – also announced yesterday – were described by Yoram Wurmser, principal analyst at research group eMarketer, as “outstanding”, despite stores closing during the Covid-19 crisis.

Apple reported an 11% year-on-year rise in revenue to $59.7 billion, and net income of $11.25 billion. International sales accounted for 60% of the quarter’s revenue.

“Some of the disruptions may have benefitted Mac and iPad sales, which were very strong and will likely remain strong as people continue to work and study at home in greater numbers,” Wurmser said.

“Even iPhone, however, did well based on strong SE sales. Despite reports of supply problems slowing the introduction of the next iPhone launch, it looks like delays will be limited to a few weeks rather than months as some had suspected.”

This week’s results come against the backdrop of the start of an antitrust hearing in the US, involving Bezos and Apple CEO, Tim Cook, and the leaders at Facebook and Google.

For more than a year, lawmakers in Congress have been investigating these four technology titans, analysing whether they have abused their power and dominance of the online market.