Amazon reveals 200pc increase in profit as shoppers move online in crisis

Amazon has revealed a 200pc leap in profits as several Silicon Valley titans posted increases in sales, in a sign that the economic havoc caused by the pandemic has done little to slow their rise.

Jeff Bezos’ online shopping giant said sales had climbed by 37pc in the third quarter of the year to $96.1bn (£74.3bn) with consumers continuing to rely on online shopping despite high street shops opening up in the summer months.

Profits rose from $2.1bn to $6.3bn, despite Amazon saying it had spent heavily on safety measures related to the virus.

However, the company predicted a slowdown in growth in the next quarter. It said most of its profits over the Christmas period would be wiped out by $4bn of costs related to Covid-19 as it seeks to prevent outbreaks in its packed warehouses.

Amazon has been one of the biggest winners of the pandemic, with Mr Bezos’ net worth climbing by $70bn this year alone. The company’s chief executive, worth around $187bn, used the results to challenge rival retailers to match the company’s minimum wage of $15 an hour.

“Two years ago, we increased Amazon’s minimum wage to $15 for all full-time, part-time, temporary, and seasonal employees across the U.S. and challenged other large employers to do the same. Best Buy and Target have stepped up, and we hope other large employers will also make the jump to $15. Now would be a great time," he said.

Facebook, Apple, Twitter and Google’s parent company Alphabet all posted rises in sales, as demand for personal electronics rose during lockdowns and advertising rebounded from the drops seen at the peak of the crisis.

Shares in Alphabet rose by 8pc in after hours trading as third-quarter profits beat Wall Street estimates, rising by 59pc to $11.2bn.

The company, which makes most of its money from advertising, saw revenue decline for the first time in its history earlier this year as advertising budgets shrunk over economic uncertainty. Sales rose by 14pc to $46bn, with search advertising, which is under pressure after the US government last week charged Google with monopoly abuse, accounting for around half of revenues at $26.3bn.

Facebook also posted a jump in sales as it shrugged off the impact of this summer's advertising boycott, in which many of the world’s top brands had paused spending in protest at the social media giant’s behaviour.

The social media giant posted revenues of $21.5bn, an increase of 22pc from the same period in 2019, and made $7.8bn in profit, up 29pc year on year.

Apple, meanwhile, managed a slight increase in sales despite the pandemic forcing the company to delay the release of its latest iPhones, which are its biggest source of revenue.

While the tech giant typically releases new iPhones in September, this year’s iPhone 12 was released only last week, too late to show up in third-quarter figures. iPhone sales declined by a fifth to $26.4bn, and the drop was particularly pronounced in China, where revenues were down by 29pc. Record sales from its Mac computer division and digital services such as the App Store offset the decline in iPhone sales, although profits dropped by 8pc to $12.7bn.

Twitter shares sank despite revenues improving amid the advertising market rebound, falling by 15pc as it revealed that users had climbed by just 1m, a significant growth slowdown.