<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Amazon (AMZN) reported first-quarter sales that topped consensus expectations and grew over last year, as consumers increasingly turned to the e-commerce company for deliveries of essentials amid widespread stay-in-place orders.” data-reactid=”16″>Amazon (AMZN) reported first-quarter sales that topped consensus expectations and grew over last year, as consumers increasingly turned to the e-commerce company for deliveries of essentials amid widespread stay-in-place orders.

However, earnings came up light as Amazon incurred costs to adapt to changing consumer demands and workforce needs.

Here were the main metrics from the report, compared to Bloomberg-compiled consensus estimates:

  • 1Q net sales: $75.5 billion vs. $73.74 billion expected and $59.7 billion Y/Y

  • 1Q earnings per share: $5.01 vs. $6.27 expected and $7.09 Y/Y

Net sales of $75.5 billion were up 26% over last year. However, net income of $2.5 billion, or $5.01 per share, fell 30% compared to the $3.6 billion, or $7.09 per share, reported in the first quarter of 2019.

That profitability pressure is likely to increase in the current quarter, with Amazon projecting $4 billion in coronavirus-related expenses.

“Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit,” CEO Jeff Bezos said in a statement. “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.”

“This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own COVID-19 testing capabilities,” he added.

Those costs could drive an operating loss of up to $1.5 billion in the second quarter, Amazon said in its guidance. On the high end, Amazon said it could deliver operating income of as much as $1.5 billion – still just half the $3.1 billion it delivered in the second quarter of last year.

Amazon said it expects net sales will be between $75 billion and $81 billion for the second quarter, representing growth of as much as 28% over last year.

The Seattle, Washington-based company has been one of the few corporations fortified by the global coronavirus pandemic, with its extensive everyday goods and grocery delivery options making it a popular choice as consumers remained confined to their homes.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="During the quarter, Amazon hired 175,000 new workers to keep pace with orders, in a testament to the ballooning demand for products off the online marketplace. But the company also had to alter its operations to meet consumer demand more narrowly focused on essential home goods and cleaning products, rather than the typical, broader product mix shift. The company also raised pay for many of its workers, generating additional expenses.” data-reactid=”29″>During the quarter, Amazon hired 175,000 new workers to keep pace with orders, in a testament to the ballooning demand for products off the online marketplace. But the company also had to alter its operations to meet consumer demand more narrowly focused on essential home goods and cleaning products, rather than the typical, broader product mix shift. The company also raised pay for many of its workers, generating additional expenses.

Shares of Amazon were up 32% for the year to date through Thursday’s close, making it one of the best-performing stocks in the S&P 500.

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Las Vegas - Circa July 2017: Amazon.com Fulfillment Center. Amazon is the Largest Internet-Based Retailer in the United States IILas Vegas - Circa July 2017: Amazon.com Fulfillment Center. Amazon is the Largest Internet-Based Retailer in the United States II
Las Vegas – Circa July 2017: Amazon.com Fulfillment Center. Amazon is the Largest Internet-Based Retailer in the United States II

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Emily McCormick is a reporter for Yahoo Finance.&nbsp;Follow her on Twitter: @emily_mcck” data-reactid=”44″>Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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