Shares of e-commerce giant Amazon (AMZN) are down 10% in premarket trading after the
company reported a $3.8 billion U.S. net loss for the first quarter and provided weak guidance
for the current second quarter.
The online retailer announced an earnings per share loss of -$7.38 U.S. compared to an $8.36
U.S. per share profit that was expected on Wall Street, according to Refinitiv data. The
company’s revenue came in at $116.44 billion U.S. compared to $116.3 billion U.S. that was
expected.
The loss was mainly attributable to Amazon recording a $7.6 billion U.S. loss on its investment
in electric vehicle maker Rivian (RIVN), whose stock has plunged nearly 70% year to date.
However, revenue at Amazon increased just 7% during the first quarter, compared with a 44%
expansion in the year-ago period. It marked the slowest rate of revenue growth for any quarter
since the dot-com bubble burst in 2001 and the second straight period of single-digit growth for
the company.
Amazon Web Services earned $18.44 billion U.S. versus $18.27 billion U.S. that had been
expected by analysts. Advertising revenue came in at $7.88 billion U.S. compared to $8.17
billion U.S. expected on Wall Street.
Looking ahead, Amazon said its second-quarter forecast suggests growth could dip further, to
between 3% and 7% from a year earlier. Amazon said it projects revenue in Q2 of $116 billion
U.S. to $121 billion U.S., lower than the $125.5 billion U.S. average analyst estimate.
Amazon has been managing several challenges, including rising inflation, higher fuel and labor
costs, global supply chain snarls, and the ongoing pandemic.
The company confirmed that it will hold its annual Prime Day discount sales event in July this
year.
Before today, Amazon stock had declined 15% year to date to $2,891.93 a share. The company
is scheduled to undertake a 20-for-1 stock split on June 6.