The COVID-19 pandemic has spurred surging demand for Amazon's (AMZN -0.06%) services, including product sales, online entertainment, and enterprise cloud platforms. But it's also generating huge costs.
The company announced on Thursday that sales jumped 26% in the first quarter, equating to an extra $16 billion of revenue. "The current crisis is demonstrating the adaptability and durability of Amazon's business as never before," CEO Jeff Bezos said in a press release, "but it's also the hardest time we've ever faced."
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Bezos went on to describe a massive corporate undertaking aimed at keeping its customers and employees safe through the pandemic. This includes the purchasing of thermal cameras, thermometers, and 100 million face masks. Amazon is building its own testing capabilities to detect the virus, has hired 175,000 additional workers in the last two months, and has raised most hourly wages.
The combined cost is likely to more than wipe out the entire total operating profit the company was expecting to generate in the second quarter. "If you're a shareholder in Amazon you might want to take a seat," Bezos explained, before noting the $4 billion projected cost of COVID-19 measures in Q2.
As for revenue, Amazon's short-term prediction envisions more head-turning gains ahead, with second-quarter sales likely to rise by between 18% and 28% to as high as $81 billion.
