As always, the online retail giant was in full focus when it reported earnings after the bell Thursday. Amazon shares moved lower and stayed lower premarket Friday after the company reported earnings of $5.01 per share, missing expectations of $6.25. Revenue of $75.5 billion, exceeded expectations of $73.61 billion.
Though the miss certainly wasn’t absent from Wall Street’s mind, what really sent the stock lower was what the company expects in the second quarter. Amazon said it plans to spend $4 billion on coronavirus-related expenses and other investments. "Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. 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," CEO Jeff Bezos said in a press release.
Bezos further emphasized large-scale spending in the quarter during Amazon’s earnings call, telling investors, “You may want to take a seat.”
Amazon also said it expects to benefit from further inclusion of live sports, emphasizing its recent deal to continue streaming NFL games Thursday night and exclusive rights to a late-season Saturday game. However, Sports Illustrated’s Jimmy Traina said the deal is a bad move for fans. “If you don't think this shuts out a decent number of people from watching the game, you have to get out of your bubble,” Traina argued.