With the COVID-19 pandemic boosting e-commerce sales, Amazon has almost doubled its net income in 2020 comapred to the obtained in 2019. The e-commerce giant has also announced CEO transition.
Amazon’s income increased to $21.3Bn, or $41.83 per diluted share, compared with net income of $11.6Bn, or $23.01 per diluted share, in 2019.
On top of net sales success posting a 38% increase against those obtained in 2019, Jeff Bezos announced he is leaving the CEO position to become Executive Chair of the company. Andy Jassy will take on the reins on the CEO spot on 3rdQ this year. Jassy is currently CEO of Amazon Web Services.
This jewish newyorker graduated with honors from Harvard College joined Amazon in 1997, with several other Harvard MBA colleagues. Jassy early roles included Marketing Manager. In 2003, he founded Amazon Web Services (AWS) with a team of 57 people. In April 2016, Jassy was promoted from senior Vice President to CEO of AWS.
“Amazon is what it is because of invention. We do crazy things together and then make them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more,” said Jeff Bezos, Amazon founder and CEO. “If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition,” Jeff Bezos said on the CEO transition.
Amazon posted net sales at $386.1 Bn in 2020, compared with $280.5 Bn in 2019. Excluding the $1.4 Bn favorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 37% compared with the obtained in 2019.
Forecast for the 1st Quarter 2021
Amazon expects net sales between $100.0 Bn and $106.0 Bn, or to grow between 33% and 40% compared with first quarter 2020. The company anticipates a favorable impact of approximately 300 basis points from foreign exchange rates.
Operating income is expected to be between $3.0 Bn and $6.5Bn, compared with $4.0Bn in first quarter 2020.
Amazon assumes approximately $2.0Bn of costs related to COVID-19 for the 1stQ 2021.
No additional business acquisitions, investments, restructurings, or legal settlements are not included in this prospect.