Shares of e-commerce giant Amazon were down about 10 percent in Thursday’s extended trading after the company posted its first-quarter results.
The company reported earnings per share of $7.38, adjusted, compared to $8.36 per share that analysts had estimated, according to Refinitiv. Revenue for the first quarter came in at $116.44 billion surpassing the estimate of $116.3 billion from analysts, according to Refinitiv.
Amazon web services (AWS) raked in $18.44 billion compared to the $18.27 billion that analysts estimated, according to StreetAccount. Advertising raked in $7.88 billion falling short of the estimate of $8.17 billion that analysts had expected according to StreetAccount.
Unfortunately, the company reported a $7.6 billion loss on its investment in electric vehicle company Rivan. Rivan shares lost more than half of their value in the quarter resulting in a total net loss of $3.8 billion.
Amazon recorded its slowest rate for any quarter since 2001 in the first quarter of 2022. The first quarter was also its second consecutive period of single-digit growth. Revenue increased in the first quarter by 7 percent compared to the same period in 2021 when revenue grew by 44 percent.
The company says it forecasts revenue to come in between $116 billion to $121 billion for the current quarter. This means that growth could dip in this current quarter to between 3 percent to 7 percent. Analysts estimate revenue to come in at $125.5 billion, according to Refinitiv.
Like other big tech companies that have reported their earnings report, Amazon blames macroeconomic challenges and supply chain issues for the setbacks the company experienced in the quarter. The company has also been dealing with other unable-to-be-ignored challenges including the ongoing pandemic, inflation, increasing labor costs, etc.
Amazon’s operating margin declined to 3.2 percent in the first quarter from 8.2 percent in the same period a year ago. “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, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020,” CEO Andy Jassy said.
Sales at AWS increased to $18.44 billion, up 36.5 percent from a year ago and above the $18.27 billion expectation. AWS generated a 57% growth in operating income to $6.5 billion.
Total operating income for Amazon declined to $3.7 billion from $8.9 billion a year ago. The Rivian markdown produced the company’s first net loss in a quarter since 2015.