E-commerce giant Amazon released its second-quarter results today, and despite inflation and a net loss of $2 billion, results were surprisingly better than expected. All of the loss is attributed to Amazon’s stake in Rivian. The second quarter net loss is compared to net income of $7.8 billion in the second quarter of 2021.
Sales rose 7% to $121.2 billion in the second quarter from $113.1 billion in the same period of 2021. That’s better than Wall Street’s estimate of $119.3 billion. dollars. The company forecast revenue between $116 billion and $121 billion for the quarter.
Due to the mild good news, shares of Amazon rose 11% in late trading Thursday.
Importantly, online store sales fell 4.3% to $50.89 billion. Wall Street only estimated a drop of about 2%.
Shares of the company are down 32% year-to-date, largely due to a string of disappointing quarterly results. At the end of April, Amazon fell in the first quarter, posting a loss of $3.84 billion. Not only did the results fall short of Wall Street forecasts, but its stock also fell 14% that day – the biggest one-day drop in 16 years.
“Despite continued inflationary pressures on fuel, energy and transportation costs, we are making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our distribution network,” said Andy Jassy, CEO of Amazon, in the company’s results. Release.
Analysts were cautious about today’s results given that it’s a risky time for Amazon as the company faces a range of headwinds including supply chain disruptions and workers, wage increases, inflation, rising fuel costs and the war in Ukraine.
Jassy added, “We’re also seeing an acceleration in revenue as we continue to make Prime even better for members, both by investing in faster shipping speeds and adding unique benefits like free shipping from Grubhub. for one year.”
Looking at other numbers, ad sales increased this quarter to $8.76 billion, up 4.3%. It’s perfect with projections. The advertising arm of the business is essential and is expected to reach $8.7 billion in revenue, up 21% from the previous year.
Amazon Web Services (AWS), the company’s cloud computing unit, contributed $19.74 billion, a 33% increase over last year. AWS is an asset to the business, and in the first quarter it grew by 35%. The future of Amazon’s cloud business is key, as the impending recession will likely lead to lower enterprise spending on cloud services.
The retail sector has seen its fair share of bad news recently, with Walmart slashing its forecast for the second quarter and full year, saying food inflation is limiting consumer spending on non-essential items. Shopify has laid off 10% of its staff due to slowing revenue growth.
Technology companies have also been there. Alphabet and Microsoft, Google’s parent company, reported results this week that fell short of Wall Street expectations. Additionally, Facebook owner Meta announced its first-ever year-over-year revenue decline.
techcrunch Gt