Amazon posts second quarterly loss in a row but shares rise on strong earnings
Amazon reported its second quarterly loss in a row on Thursday but the company’s share price gained over 10% in after-hours trading on stronger than expected earnings.
Sales for the three months ending in June increased by 7% to $121bn compared with $113.1bn in the second quarter of 2021. The increase marks one of the slowest growth periods for Amazon in its history but was better than expected.
In April when Amazon last reported quarterly earnings the company’s share price dropped sharply after it announced its first loss since 2015 and said sales had slowed. This time Amazon’s chief executive officer, Andy Jassy, was more upbeat.
“Despite continued inflationary pressures in fuel, energy and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network,” said Jassy.
The company reported a second quarterly loss of $2bn compared with a $7.8bn profit for the same period in 2021. Amazon reported a $3.8bn loss in the previous quarter. Much of that loss was due to its investment in Rivian Automotive, a struggling electric vehicle manufacturer.
The company’s online stores business reported a 4% decline for the quarter as it, along with other retailers, struggled with slowing consumer demand and higher costs. Amazon was one of the biggest winners during the height of the coronavirus pandemic as shoppers moved online. But the company has now said it expanded too aggressively during the pandemic.
Amazon Web Services (AWS), its cloud computing division, reported revenues of $19.7bn for the quarter, better than expected.
The company expects to post third-quarter revenue between $125bn and $130bn, representing growth of 13% to 17%.
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