Amazon (AMZN  ) is 8% lower following its first-quarter earnings report. The company handily beat revenue estimates but fell short on earnings largely due to increased costs stemming from the coronavirus. Amazon's stock has been one of the biggest winners of the year. It even managed to make new, all-time highs in mid-April even as the broader market was much lower.

Its first-quarter earnings show that while the coronavirus pandemic is leading to more sales and transactions for Amazon, it's also resulting in higher costs. Further, the company remains focused on increasing market share at the expense of near-term profits.

Inside the Numbers

Amazon posted $5.01 per share in earnings which is below estimates of $6.85 per share. Revenue was $75.45 billion for the quarter above consensus of $73.6 billion. This was a 26% increase over the first quarter in 2019, but it was lower than the 42% growth in Q1 2019.

Throughout its history, Amazon has focused on growing sales and market share at the expense of earnings. Equally important, its investors have not punished the stock for this strategy. The company expects to increase spending by $4 billion to better protect its workers, increase pay for front-line employees, and ensure that there are no disruptions.

These expenses include testing of employees, more cleaning of facilities, less efficiency in warehouses to ensure social distancing, and personal protective equipment for staff. It has also hired 175,000 warehouse workers in March and April. Given this increased spending, the company is projecting between a $1.5 billion loss to a $1.5 billion profit which came in well below expectations.

The stock price weakness is understandable given that many were expecting windfall profits this quarter as Amazon is perfectly positioned for this moment given its abundance of offerings, fast shipping times, and lockdown measures that encourage online shopping. Another factor denting Amazon's earnings was more demand for lower-margin, household products, and decreased demand for higher-margin, big-ticket items.

One bright spot in the report was the continued strong performance of its high-margin, cloud division, AWS. The unit reported first-quarter revenue of $10.2 billion which was 33% growth from Q1 2019. It generated $3.1 billion in profit. Many of its customers like Zoom Communications (ZM  ), Netflix (NFLX  ), and Slack (WORK  ) are seeing big jumps in usage and signups.