Amazon.comAMZN2631,00 $
28 April Amazon reported for the first quarter of 2022, and its shares in the post-market fell by 9%, to 2632 $. The company reported its weak results, failed investments and gave a poor forecast for the quarter.
Revenue and operating profit
Here's how the retailer's key metrics changed compared to the same quarter last year, 2021 of the year.
Amazon's total revenue increased by just 7%, up to $116.4 billion. This is the slowest growth since 2001.. For comparison: over the past five years, the company's sales have increased by an average of 28% in year.
Amazon explained the bad results in the same way, like many other companies: macroeconomic conditions are to blame. It's inflation., supply disruptions, high logistics and personnel costs. The company expects, that in the second quarter sales will grow even less - by 3-7%.
Combined sales in the North America and International segments, which are retail and digital services in North America and other countries, grew only by 3%. Total revenue increased largely due to AWS cloud business, which added 37%.
For the same reasons, i.e. high costs, Amazon's operating profit fell by almost 60%, up to $3.7 billion. Retail business again brought a loss, and all operating profit was generated by AWS.
According to company forecasts, Q2 operating income will be between -1 and $3 billion.
Revenue in the first quarter, billion dollars
| 2021 | 2022 | |
|---|---|---|
| North America | 64,4 | 69,2 |
| International | 30,6 | 28,8 |
| AWS | 13,5 | 18,4 |
| Total | 108,5 | 116,4 |
Operating profit in the first quarter, billion dollars
| 2021 | 2022 | |
|---|---|---|
| North America | 3,4 | −1,6 |
| International | 1,3 | −1,3 |
| AWS | 4,2 | 6,5 |
| Total | 8,9 | 3,7 |
Net profit
Amazon posted a net loss for the first time since 2015, which amounted to 3.8 billion dollars. The main reason for this loss is the revaluation of Rivian shares..
Young electric car maker with Amazon investment goes public in November 2021. In the first week of trading, Rivian rose by 70%, from 100 to 170 $. Already by the end of the year they fell to the IPO level. In 2022, the bubble continued to deflate: since the IPO, securities have fallen by 70%, Amazon lost $7.6 billion on investments in the first quarter.
This Amazon loss is “paper”, i.e. unrealized. And he'll stay that way, until the company sells its shares. Something else is important in the Amazon report: because of those same "macro conditions" the retailer's core business is still suffering, and not necessarily, that the situation will change in the coming quarters.
