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Amazon tells investors to “take a seat” as billions of profits to be invested in coronavirus-related plans

Usually, the online shopping giant would make US$4bn in quarterly profits, which will be invested to ramp up capacity and safety

Amazon.com, Inc. - Amazon tells investors to “take a seat” as billions of profits to be invested in coronavirus-related plans

Amazon Inc (NASDAQ:AMZN) is planning to invest at least US$4bn to ramp up capacity and safety measures in its locations.

Founder and chief executive Jeff Bezos told shareholders to “take a seat”.

READ: Amazon’s Deliveroo investment gets CMA clearance as takeaway firm risks failure amid pandemic

“Under normal circumstances, in this coming Q2, we’d expect to make some US$4bn or more in operating profit,” he said.

Now, operating income for the quarter to June could be between US$1.5bn and a US$1.5bn loss after factoring in the extra investment.

“As well as the obvious health benefits for Amazon’s 840,000 employees this could mark a watershed moment for client acquisition and sacrificing a single quarter’s profits to secure political and public goodwill would have long term advantages,” commented Nicholas Hyett, analyst at Hargreaves Lansdown.

Net sales are expected to jump by 18-28% to US$75-81bn as worldwide lockdowns keep driving online shopping demand.

In the quarter to 31 March, sales climbed 27% to US$75.5bn compared to last year, for operating income down 9% to US$4bn.

Shares dropped 5% to US$2,356 in after-hours trading.

Quick facts: Amazon.com, Inc.

Price: 3200 USD

NASDAQ:AMZN
Market: NASDAQ
Market Cap: $1.6 trillion
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