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Comment by overcast | Hacker News Reader

Those AMZN numbers are completely nonsensical, how do you beat estimates by 9x? Who the hell did that estimating???

Because Amazon is comparatively low-margin vs. other tech companies, improved revenue has a much greater effect on earnings. Amazon's revenue was $88.9B vs. $81.24B expected. That's each household spending about 10% more from Amazon, which is pretty reasonable with lockdown and nobody going to brick & mortar retail outlets. But with expenses at around $80B, that translates into earnings of $10.30/share vs. $1.51.

> Because Amazon is comparatively low-margin vs. other tech companies, improved revenue has a much greater effect on earnings.

Are you saying that 10% revenue increase has led to 10x earnings beat? That doesn't make any sense.

How does basic arithmetic not make sense?

If you were expected to make $1.01 and spend $1, and instead you made $1.10 and spent $1, your revenue only beat by 9% but your income beat by 900%.

If a lot of their costs are fixed it makes sense.

Amazon promised to spend all of their profits on reinvestment into the company, but they didn't.

Uh? They expected to have $4B in profit, said they may spend $4B on extra expenses this period -> but demand has SOARED and they already huge, so absolutely pumping out the $.

I know we've read about the major strikes by Amazon workers here repeatedly (supposedly all of them walking out etc). Doesn't seem to have affected the top line sales at least.

You purposely set them very low, then "beat" them and watch stock price go to the moon.

Possible that estimates were before COVID was affecting us?

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