Amazon posts biggest profit ever during pandemic

Amazon.com Inc. earned $5.2 billion in the second quarter to double its net income from last year and realize the biggest profit in its 26-year history despite spending around $4 billion on COVID-19 related expenses.

Online store sales surged 48 percent to $45.9 billion during the quarter.

Meanwhile, business from third-party merchants resulted in a 52 percent jump and a 41 percent increase in other revenue, such as from ads.

Amazon founder Jeff Bezos called its performance "highly unusual."

The company forecasted losing money in the second quarter due to $4 billion COVID-19 related expenditures, mainly on staff protective equipment.

According to Investing.com senior analyst Jesse Cohen, Amazon's business model sets it up for more expansion as the global pandemic continues to flare.

Revenue from Amazon Web Services (AWS), which sells cloud computing power and data storage, surged nearly 29 percent to $10.81 billion as companies switched to virtual offices due to the pandemic.
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According to Amazon's chief financial officer Brian Olsavsky, the profit surprised them because, at the time of its forecast last quarter, shoppers were buying lower-margin products such as masks, gloves, and groceries were not "super-profitable."

However, in the second quarter, product choices started to shift back to normal and that they were able to ship a lot more than originally expected.

Amazon also benefitted from a step up in customer spending in Europe and Japan during the pandemic.

Shares rose five percent in after-hours trade.

Amazon's shares have risen by over 60 percent this year.