Amazon sees spending $4 billion in Q2 operating profit on coronavirus-related expenses

Amazon said on Thursday it expects to spend its entire $4 billion operating profit in the second quarter on coronavirus-related expenses including “hundreds of millions” to ramp up its own testing capability for the virus.

Amazon’s chief executive Brian Olsavsky told CNBC he expects the company would spend $1 billion on testing in the full year 2020.

The company has designated a team of researchers, engineers, procurement specialists, and programme managers to work on building incremental testing capacity. It added that the team is building a lab and has already begun a pilot test of front-line employees.

“We’re not sure how far we will get in the relevant timeframe, but we think it’s worth trying, and we stand ready to share anything we learn,” Amazon noted in the release.

Some of the $4 billion will also finance higher wages for workers, personal protective equipment (PPE), better cleaning protocols at facilities, and “less efficient process paths” that will maintain social distancing.

“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” Amazon added.

“Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances.”