Shares of Amazon Inc (NASDAQ:AMZN) plunged almost 10% in after-hours trading after the company reported a net loss of $3.8 billion in the first quarter ended March 31. The e-commerce giant fell short of a $4.4 billion profit forecast by analysts.
Profit Hit
As reported by CNN Business, Amazon went down from an $8.1 billion profit in the same period last year. The company said a $7.6 billion loss from investments in electric car manufacturer Rivian Automotive Inc (NASDAQ:RIVN) was the main factor behind the profit blow.
Q1 2022 hedge fund letters, conferences and more
Rivian stock has crashed by 75% since going public in November last year, which then became the biggest IPO since Facebook —Meta Platforms Inc (NASDAQ:FB).
Amazon CEO Andy Jassy said in a statement, “The pandemic and subsequent war in Ukraine have brought unusual growth and challenges.”
“Today, as we're no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network,” he further said.
Outlook
Still, Amazon beat overall revenue expectations which grew by 7% to $116.4 billion from the same quarter last year. Next quarter, revenue is expected to decrease further with estimates placing it between 3% and 7%.
According to Refinitiv, the company estimates revenue of between $116 billion and $121 billion in the current quarter, short of the $125.5 billion expected by analysts.
With regards to profit and the current global situation, Jassy said: “This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions.”
They include, he said, “delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020.”
“Amazon’s cloud-computing unit continues to hum along, as the company fends off competition from Microsoft and Google. Sales at Amazon Web Services increased 36.5% from a year earlier to $18.44 billion, above the $18.27 billion projected by Wall Street,” as reported by CNBC.
