Amazon announces $96.15bn third-quarter revenue

Jessica Paige 30 October 2020 (Last Updated October 30th, 2020 17:16)

Amazon yesterday announced $96.15bn third-quarter (Q3) revenue, surpassing industry expert and analyst expectations.

Amazon announces $96.15bn third-quarter revenue
Amazon expects sales to surpass $100bn in the fourth quarter (Q4) due to Black Friday and Christmas spending. Credit: Christian Wiediger via unsplash.

Amazon yesterday announced $96.15bn third-quarter (Q3) revenue, surpassing industry expert and analyst expectations.

Amazon’s net income increased to $6.3bn between July and September, which is $4.2bn more than the company made in the same period last year. Amazon’s cloud-services unit, Amazon Web Services (AWS), earned net sales of $11.6bn for the quarter.

Analysts expected lower revenue as the retailer had spent $4bn on Covid-19 coronavirus safety measures, including personal protective equipment (PPE) and wage increases of 37%.

Amazon CFO Brian Olsavsky said: “In total, we have incurred more than $7.5bn in incremental Covid-related costs in the first three quarters of 2020, and we expect to incur approximately $4bn in Q4.”

According to Olsavsky, Amazon added 250,000 jobs in the third quarter and has already added 100,000 in the first month of the fourth quarter in preparation for increased consumer spending.

Amazon’s expectations for the future

Amazon expects sales to surpass $100bn in the fourth quarter (Q4) due to Black Friday and Christmas spending.

Amazon founder and CEO Jeff Bezos said: “[Amazon is seeing] more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season. Big thank you to our employees.”

Olsavsky said: “We’ll all be stretched. It’s advantageous to the customer, and probably to the companies, for people to order early this year.”

Retailers selling through Amazon need to focus on marketing

Analysts have advised retailers who use the Amazon platform to make use of Amazon’s advertising services to implement promotional and marketing strategies to attract customers in Q4.

US-headquartered marketing agency Rakuten Advertising SVP for Northern Europe Nick Fletcher said: “These latest results come as little surprise following Amazon’s record Q2 earnings and the accelerated adoption of online shopping by consumers globally due to the pandemic. The recent buzz of Prime Day is positive news for retailers in the lead up to Black Friday and Cyber Monday. The results show that consumers are still spending, and we expect this to continue.

“Retailers need to ensure that their promotional and marketing strategies are geared towards engaging and reaching consumers with targeted and personalised messages that are optimised towards converting audiences over this peak shopping period.”

Amazon share prices

Despite the positive results, Amazon’s stock traded around 4% lower after announcing the Q3 results.

Amazon’ share price at the time of reporting is 3089.52p, having fallen from 3205p yesterday.