Amazon has announced that its Founder and CEO, Jeff Bezos, will be stepping down and transitioning as executive chairman. The move will happen during the third quarter of this year. Andy Jassy, CEO of Amazon’s subsidiary, Amazon Web Services, was named Bezo’s successor in the chief executive role.
Amazon’s fourth-quarter results were also announced and showed robust growth in the company’s flagship e-commerce division. Amazon’s sales for the quarter were up by 44 percent, or $125.6 billion, surpassing its own predictions as well as Wall Street’s. The company had previously set a guidance range of $112 billion to $121 billion. Wall Street analysts had predicted $119.8 billion in sales.
Amazon also posted $14.09 per share in profits for the final quarter of 2020. That figure represented nearly double of Wall Street’s prediction of $7.23 per share. The e-commerce giant reported a $6.9 billion operating income for the fourth quarter, once again surpassing the forecast of $1 billion to $4.5 billion. Amazon’s net income was also up from a year ago at $7.2 billion.
Amazon’s Chief Financial Officer, Brian Olsavsky, said that the company’s expenses grew during the fourth quarter due to Covid-related costs, including testing of Amazon’s workers. Expenses due to Covid during the final quarter resulted in $4 billion in expenditures. The company has been testing 700 employees an hour on average for the novel coronavirus. In all, Amazon posted over $11.5 billion in Covid-related expenses for the entire year of 2020.
But sales were up in 2020 by 38 percent. Sales went from $280.5 billion the year before to $386.1 billion over the past year.
Bezos commented on Amazon’s strengths by stating, “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. 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.”
Bezos noted to his employees that his new areas of focus in his new role would be early initiatives and new products while making time for the Bezos Earth Fund, Day 1 Fund, The Washington Post, and other endeavors of interest to him.
“I’ve never had more energy, and this isn’t about retiring. I’m super passionate about the impact I think these organizations can have,” Bezos added.
Amazon shares initially fell after the announcement but regained some composure and ended up 1.2 percent higher.