Bezos Resigns With Amazon At Its Peak

ER Editor: This has to be one of the weirder stories of a particularly weird month in which several governments suddenly got into trouble (after Italy was revealed to be behind US election fraud); four top bankers and corporate owners suddenly met their end; blackouts happened, with some strange reportings around the Vatican; the Catholic Church lost four senior people in 2 days, &etc. See Dutch Government Suddenly Collapses – And Other Curious Events [VIDEO]. We offer below journalist Cesare Sacchetti’s speculative tweet, none of which constitutes proof of anything.
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It is certainly odd that all our governments have, on cue, forced scientifically unjustified, liberty-destroying lockdown on us in the past few months, which has PRECISELY BENEFITTED CORPORATIONS such as Bezos’ to the tune of many additional billions.  He was a beneficiary of the grand covid plan. And now this.

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Amazon Reports Blowout Quarter, Jeff Bezos Stepping Down As CEO

Tyler Durden's Photo   TYLER DURDEN

With Amazon and Google, together representing a whopping $3.1 trillion in market cap almost as large as the entire Russell 2000, set to report earnings after the close Bloomberg noted that some investors were nervous that anything but a massive beat, well in excess of expectations would be required to avoid a dip in the Nasdaq (recall last week’s drop in AAPL and TSLA stock following stellar earnings reports).

So what is the absolute lowest numbers that Amazon has to beat in Q4 to avoid sliding? Here are the consensus estimates:

  • Net sales: $119.70 billion
  • GAAP EPS: $7.34
  • AWS net sales: $12.77 billion
  • Operating income: $4.47 billion

Amazon was expected to post a record year, its sales supercharged by the pandemic with the online retail giant among the main beneficiaries. The debate retail watchers are having now is the extent to which people are going to go back to physical stores when the virus recedes.

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So with all that in mind, how did Amazon do? Well, in light of the continued covid lockdowns, it will probably not be a surprise that it was another blockbuster quarter for the retailer which blew away consensus estimates:

  • Q4 Net Sales $125.56B, beating estimates of $119.70B
  • Q4 EPS $14.09, smashing estimates of $7.340, more than double the $6.47 year ago.
  • Q4 Operating Income $6.9B, beating estimates of $4.47B, up 77% Y/Y
  • Q4 AWS Net Sales $12.74B, just missing estimates of $12.77B, up 28% Y/Y
    • Amazon Web Services net sales +28% vs. +34% y/y, estimate +28.3%
  • Fulfillment expense $18.47 billion, estimate $18.52 billion

Looking ahead, the company’s guidance was also solid:

  • Amazon Sees 1Q Net Sales $100.0B to $106.0B, Est. $95.72B
  • Operating income Q1 expected between $3.0 billion and $6.5 billion, compared with $4.0 billion in first quarter 2020.

… but the real bombshell in today’s report is that CEO Jeff Bezos will step down as CEO and “transition” to the role of executive chair in Q3 2021, who after 27 years at the helm of the retailer he founder, is ending an era at Amazon.

Discussing his life plans after Amazon, Bezos says that “as Exec Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions. 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 will be replaced with Andy Jassy – currently the CEO of Amazon Web Services – as CEO of the entire company at that time.

Jeff’s parting words:

Amazon couldn’t be better positioned for the future. We are firing on all cylinders, just as the world needs us to. We have things in the pipeline that will continue to astonish. We serve individuals and enterprises, and we’ve pioneered two complete industries and a whole new class of devices. We are leaders in areas as varied as machine learning and logistics, and if an Amazonian’s idea requires yet another new institutional skill, we’re flexible enough and patient enough to learn it.

Keep inventing, and don’t despair when at first the idea looks crazy. Remember to wander. Let curiosity be your compass. It remains Day 1.

Here is the letter sent from Bezos to the company’s employees:

Fellow Amazonians:

I’m excited to announce that this Q3 I’ll transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO. In the Exec Chair role, I intend to focus my energies and attention on new products and early initiatives. Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence.

This journey began some 27 years ago. Amazon was only an idea, and it had no name. The question I was asked most frequently at that time was, “What’s the internet?” Blessedly, I haven’t had to explain that in a long while.

Today, we employ 1.3 million talented, dedicated people, serve hundreds of millions of customers and businesses, and are widely recognized as one of the most successful companies in the world.

How did that happen? Invention. Invention is the root of our success. We’ve done crazy things together, and then made 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 get it right, a few years after a surprising invention, the new thing has become normal. People yawn. And that yawn is the greatest compliment an inventor can receive.

I don’t know of another company with an invention track record as good as Amazon’s, and I believe we are at our most inventive right now. I hope you are as proud of our inventiveness as I am. I think you should be.

As Amazon became large, we decided to use our scale and scope to lead on important social issues. Two high-impact examples: our $15 minimum wage and the Climate Pledge. In both cases, we staked out leadership positions and then asked others to come along with us. In both cases, it’s working. Other large companies are coming our way. I hope you’re proud of that as well.

I find my work meaningful and fun. I get to work with the smartest, most talented, most ingenious teammates. When times have been good, you’ve been humble. When times have been tough, you’ve been strong and supportive, and we’ve made each other laugh. It is a joy to work on this team.

As much as I still tap dance into the office, I’m excited about this transition. Millions of customers depend on us for our services, and more than a million employees depend on us for their livelihoods. Being the CEO of Amazon is a deep responsibility, and it’s consuming. When you have a responsibility like that, it’s hard to put attention on anything else. As Exec Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions. 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.

Amazon couldn’t be better positioned for the future. We are firing on all cylinders, just as the world needs us to. We have things in the pipeline that will continue to astonish. We serve individuals and enterprises, and we’ve pioneered two complete industries and a whole new class of devices. We are leaders in areas as varied as machine learning and logistics, and if an Amazonian’s idea requires yet another new institutional skill, we’re flexible enough and patient enough to learn it.

Keep inventing, and don’t despair when at first the idea looks crazy. Remember to wander. Let curiosity be your compass. It remains Day 1.

Jeff

In stepping down from day-to-day leadership and taking and executive chairman role, Jeff Bezos is following the path laid down by Microsoft Co-Founder Bill Gates, who after handing off control to Steve Ballmer, stayed involved in many of Microsoft’s most important initiatives, advising engineers regularly. Bezos’s farewell letter to employees seems to envision a similar role: “I intend to focus my energies and attention on new products and early initiatives.”

So who is Andy Jassy? As Bloomberg notes, for those of you who haven’t tracked Amazon’s rise to the top of cloud computing, here is a little background:

  • He’s a longtime Amazonian, and a former technical advisor, a sort of chief of staff role, to Jeff Bezos.
  • Colleagues say he’s Bezos-like in his preference for data-driven decisionmaking and customer focus.
  • The unit he led, Amazon Web Services, reshaped how companies buy technology. It is far and away the leader in rented software services and computing power.
  • After the retirement earlier this year of Amazon’s consumer unit CEO Jeff Wilke, Jassy was the natural heir apparent. This makes that official.
AMZN’s new CEO Andy Jassy.

Jassy’s ascent to the top comes amid calls to spin out AWS as a separate company; however, today’s decision appears to be the main reason why Bezos resisted that pressure.

Going back to the Q4 numbers, they will clearly take on a secondary importance after this blockbuster news, we find that the company’s revenue grew by a whopping 44% in Q4, the biggest increase since 2011 (with Q1 midline revenue projected to grow a solid 36.5%.

At the same time, profit margin dipped modestly in Q4, sliding from 6.4% in Q3 to 5.5%

While International profit margins dipped (after turning positive for the first time ever in Q2), it was the decline in AWS margins to 27.9%, the lowest since 2019, that may spook some investors.

The company ends the quarter with a record 1.3 million workers, up 63% Y/Y.

And speaking of Jassy’s AWS, the Amazon cloud segment had another solid quarter, bringing in $12.7 billion in sales, just under analyst estimates. Operating margin was up year over year for a fourth consecutive quarter. That’s going to reassure investors looking for strength from Amazon’s de facto cash machine amid fierce competition from rivals like Microsoft and Google.

Looking ahead, during the call, CFO Olsavsky said COVID expenses in Q1 will drop to $2 billion from $4 billion in Q4 mostly since the warehouses are less busy than they were during the holiday quarter. Olsavsky also said that Jeff Bezos “will remain deeply involved in product development and innovation” although there is still no announcement on who will run cloud unit.

The stock initially tumbled on the news of Bezos’ departure, which is already trending on Twitter…

… only to rip higher as attention shifted back to the company’s blowout earnings and the realization that between his divorce and his shmoozing across Hollywood parties, Bezos had already checked out:

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https://www.thelibertybeacon.com/bezos-resigns-with-amazon-at-its-peak/
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