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Amazon (NASDAQ:AMZN) execs outlined the heavy costs associated with COVID-19 during the company’s earnings conference call.
The company is spending $300M on virus testing as part of its $4B total COVID-19 expense that also includes personal protective equipment and enhanced facility cleaning. A top priority for the company is making sure consumers’ essential needs are delivered. Amazon has hired 175K workers to meet demand and increased wages for frontline workers.
While overall demand is strong with consumers stuck at home, AMZN notes that the apparel, shoes and wireless product categories have lagged.
The wide range for the Q2 operating income guidance (-$1.5B to +$1.5B) layers in plenty of uncertainty on how the quarter will go as large parts of the U.S. move off their stay-at-home orders.
Shares of Amazon are down 4.85% in AH trading to $2,353.30.
During the earnings call, Apple (NASDAQ:AAPL) confirms it won’t issue guidance for FQ3 due to the coronavirus uncertainties.
For Q3, Apple sees a revenue headwind in the U.S. dollar appreciation. Wearables and iPhones should decline Q/Q in the June quarter. Services is expected to grow Q/Q and iPad and Mac on a Y/Y basis.
Back to Q2, Tim Cook says the first five weeks of the quarter were strong before the coronavirus hit China. The last three weeks felt the pressure of stores closing outside of China and a sharp drop in iPhone demand.
In the second half of April, Apple picked up thanks to new product launches and the work from home shift changing consumer behavior.
Microsoft (NASDAQ:MSFT) offers to exchange an existing ten series of notes for a new series due June 1, 2050.
The aggregate principal of the new notes is up to $6.25B.
The tech giant will also exchange a four series of notes for a new series due June 1, 2060, which have an aggregate principal of up to $3B.
Western Digital (NASDAQ:WDC) falls 5.3% after reporting a FQ3 revenue beat and EPS miss for the period ending on March 29, which featured little coronavirus damage.
Coronavirus impact: Notebook solutions had greater than expected demand due to the remote work shift, which brought desktop solutions down. Smart video hard drive demand was also down. Mobile flash bit shipments remained “modest.”
Q3 revenue breakdown: Client Devices, $1.8B (+13% Y/Y); Data Center, $1.5B (+22%); Client Solutions, $821M (+2%).
Operating cash flow totaled $142M with FCF of $176M. WDC ended the quarter with $2.9B in cash and equivalents.
WDC is suspending its dividend to improve its leverage ratios.
Q4 guidance sees revenue of $4.2-4.5B (consensus: $4.3B) and EPS of $1-1.40 (consensus: $1.22).
Bandwidth (NASDAQ:BAND): Q1 Non-GAAP EPS of $0.04 beats by $0.15; GAAP EPS of -$0.04 beats by $0.12.
Revenue of $68.5M (+28.5% Y/Y) beats by $5.21M.
