“Despite continued inflationary pressures in fuel, power and transportation costs, we are making progress on costs,” CEO Andy Jazzy said.
Amazon Inc (AMZN) posted a second straight quarterly loss on Thursday, but beat street sales forecasts and posted solid earnings from its market-leading cloud division, sending the shares sharply higher in after-hours trading.
Amazon said its second-quarter loss was pegged at $2 billion, or 20 cents a share, down from a profit of 76 cents a share during the same period last year and notably below Street’s consensus forecast of 13 cents per share. Amazon’s stake in Rivian Automotive (RIVN) cost the group about $3.9 billion, which it included in non-operating income expenses.
Revenue rose 7.2% from last year to $121.2 billion, well above analyst estimates of $119.08 billion. Amazon Web Services contributed $19.74 billion, an increase of 33% from last year. Ad sales were also higher, up 18% to $8.76 billion. Online store sales, however, fell 4.3% to $50.885 million.
Walmart’s (WMT) earnings warning earlier this week, linked in part to higher-than-expected inventory levels and ongoing inflationary pressures that have squeezed profit margins, set the stage for a weaker reading from Amazon. .
However, since most of its sales, 57%, filtered through third-party sellers, Amazon did not suffer the same increase in inventory, and its cash-generating web services division helped offset the decline in sales in line.
“Despite continued inflationary pressures in fuel, power and transportation costs, we are making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network,” said CEO Andy Jassy. .
“We’re also seeing revenue accelerate as we continue to improve Prime for members, invest in faster shipping speeds, and add unique benefits like free Grubhub delivery for a year, exclusive access to NFL Thursday Night Football games, and more. from September. on September 15, and the launch of the highly anticipated Lord of the Rings: The Rings of Power series on September 2,” he added.
Amazon shares rose 12% in after-hours trading immediately after the earnings release to signal a Friday opening bell price of $136.98 each.
Amazon completed its planned 20-for-1 stock split in early June, bringing the price per share closer to large-cap tech peers like Apple ( AAPL ), Google’s parent company Alphabet ( GOOGL ), and Meta Platforms ( META ). ).
Looking ahead to the current quarter, Amazon said it sees operating income of between zero and $3.5 billion, on revenue in the range of $125 billion to $130 billion, compared to Refinitiv’s forecast of around $126.5 billion. millions.
“Despite a further rate hike from the Fed, inflationary pressure, and increased market volatility, Amazon had a strong second quarter,” said Krista Morgan of Stage, a mostly women-led private equity group based in London. Denver.
“The company managed to exceed expectations and outperform competing retail giants such as Walmart, which were forced to reassess profit margins,” he added. “This is likely largely due to the company’s cloud business, Amazon Web Services. As consumers have moved away from electronics and retail to cut costs, cloud services have remained stable and in demand”.