Amazon shares surge on earnings beat, despite $2 billion loss – TechCrunch

E-commerce giant Amazon announced its second-quarter results today, and despite inflation and a net loss of $2 billion, results were surprisingly better than expected. All losses are due to Amazon’s stake in Rivian. The net loss in the second quarter compares to a net profit of $7.8 billion in the second quarter of 2021.

Sales increased 7% to $121.2 billion in the second quarter, compared to $113.1 billion in the same period in 2021. This was better than Wall Street’s estimate of $119.3 billion. The company forecast revenue of between $116 billion and $121 billion for the quarter.

On the slightly good news, Amazon shares rose 11% in late trading Thursday.

It’s important to note that online store sales fell 4.3% to $50.89 billion. Wall Street estimated a roughly 2% drop.

The company’s stock is down 32% since the beginning of the year, mainly due to a disappointing streak of quarterly earnings. In late April, it toppled Amazon in the first quarter, posting a loss of $3.84 billion. Not only did the results fall short of Wall Street expectations, but its stock fell 14% that day — the biggest one-day drop in 16 years.

Andy Gacy, Amazon CEO, said in the company’s earnings report: “Despite continued inflationary pressures in fuel, energy, and transportation costs, we are making progress on the more manageable costs we noted in the past quarter, particularly improving network productivity. Our achievement.” Release.

Analysts were wary of today’s results, as it is a difficult time for Amazon, as the company has faced a host of hurdles such as supply chain and worker disruptions, wage increases, inflation, rising fuel costs and the war in Ukraine.

Gacy added, “We’re also seeing an acceleration in revenue as we continue to improve Prime for members, whether by investing in faster shipping speeds, or adding unique benefits like free delivery from Grubhub for a year.”

Looking at other numbers, ad sales were higher this quarter, at $8.76 billion, up 4.3%. This is the case with projections. The company’s advertising arm is essential and its revenue is expected to reach $8.7 billion, up 21% from the previous year.

Amazon Web Services (AWS), the company’s cloud computing unit, contributed $19.74 billion, up 33% from last year. AWS is an asset to the company, and during the first quarter, it grew 37%. The future of Amazon’s cloud business is key, as the looming recession will likely cause businesses to spend less on cloud services.

The retail industry has seen its fair share of bad news recently, as Walmart cut its second-quarter guidance and full-year guidance, saying food inflation is limiting consumer spending on non-essential items. Shopify has laid off 10% of its employees due to slow revenue growth.

Tech companies were going through it, too. Alphabet and Microsoft, the parent company of Google, reported earnings this week that did not meet Wall Street expectations. Also, the owner of Facebook Meta reported its first year-over-year revenue decline.

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