Amazon reported a loss of $3.8 billion for the quarter ended March 31.
Amazon reported a first-quarter loss of nearly $4 billion after being hit with a $7.6 billion loss on its investment in electric vehicle company Rivian.
The online giant reported a loss of $3.8 billion, or $7.56 a share, for the quarter ended March 31, compared to a net income of $8.1 billion, or $15.79 per share, in the year-ago period. Analysts had expected earnings of $8.35 a share.
Amazon attributed the loss largely to a $7.6 billion loss from its investment in Rivian after shares in the electric vehicle manufacturer lost more than half their value in the quarter. That resulted in a total net loss of $3.8 billion.
Net sales increased 7% to $116.44 billion from $108.52 billion. Analysts had expected sales of $116.45 billion.
The company’s cloud computing division, Amazon Web Services,continues to be the biggest driver of profit for Amazon. The division had an operating profit of $6.52 billion in the quarter, with revenue up 37% year-over-year to $18.44 billion, topping analysts’ expectations for $18.27 billion. AWS has been growing 34% annually during the last two years.
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” stated Andy Jassy, Amazon CEO.
Amazon reported operating expenses of $112.7 billion, compared to $99.6 billion a year ago. Expenses for fulfillment totaled $20 billion while technology and content accounted for $14.8 billion.
Jassy noted that the company’s consumer business has grown 23% annually during the past two years, with extraordinary growth in 2020 of 39% year-over-year, which necessitated doubling the size of its fulfillment network that it built over Amazon’s first 25 years—and doing so in only 24 months.
“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 said. “We know how to do this and have done it before. 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.”
For the second quarter, Amazon said it expects second-quarter revenue of $116 billion to $121 billion. Analysts were projecting sales of $125.5 billion.