Amazon announces its first losses since 2015

Amazon announces its first losses since 2015

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Amazon lost $ 3.8 billion due to losses from its investment in the Rivian auto industry, and sales growth is at its slowest pace in nearly 20 years.

Exiting the pandemic is not good news for Amazon. The end of the restrictions, the resumption of a more normal life for its millions of customers, who are now less dependent on home deliveries, is affecting the e-commerce giant. Quarterly losses of $ 3.8 billion that shock its shareholders.

The company’s sales growth was only 7% during the period, the lowest rate in almost 20 years. Amazon’s turnover thus reached $ 116.4 billion. Amazon is also falling victim to the troubles that plague other companies in these difficult times, even the most successful ones like Apple: its supply chains are still disrupted, its labor costs are rising and inflation is coming. spoil the favorable environment from which he has long enjoyed.

Wall Street frustration is even more acute as Andy Jassy, ​​Jeff Bezos’s successor at Amazon, does not rule out further losses for the current quarter. “The pandemic and the ensuing war in Ukraine have created obstacles and challenges to our development.“, sums up.

The share price fell more than 9%

Its forecast range is between $ 1 billion in losses from April to June and $ 3 billion in profits. However, in 2021, at the same time, Amazon made a profit of $ 7.7 billion. Amazon expects revenue of between $ 116 billion and $ 121 billion in the second quarter alone. Wall Street was hoping for more than $ 125 billion.
In this context, the share price fell more than 9% in the OTC market, after the closing of the Nasdaq on Thursday night. At the opening of Friday morning, the share price is expected to make an equivalent dip, restoring the capitalization of the Amazon empire to the level of June 2020.

Not everything is black, though. Amazon Web Services (AWS), the group’s subsidiary, a pioneer in cloud computing services, continues to play its role as a locomotive. It reports a new jump of 37% of its quarterly turnover to more than $ 18 billion. In addition, Amazon is proud of its performance in digital advertising, a new field that puts it in direct competition with Google and Meta Platforms. The volume of activity in this position has increased by 23% last year. Amazon has reached nearly $ 8 billion in revenue there.

The other source of consolation is that Amazon’s first quarterly losses since 2015 are largely related to the $ 3.8 billion accounting burden required to reduce its stake in electric car maker Rivian. Ford, another investor in Rivian, sees its quarterly results being weighed down by the annoyance of a manufacturer who dreams of one day competing with Tesla. “Our teams are fully focused on improving productivity and reducing costs in our logistics network. We know how to do it, we have done it again“It’s true that the weaker demand pressure, especially in North America, means that Amazon no longer needs to invest in new warehouses at the moment.”

The company intends to focus on better management of its inventories and hopes that its suppliers, especially in Asia, will overcome the problems of production and delivery of goods. Brian Olsavsky, chief financial officer of Amazon, estimates that the company incurred an additional $ 6 billion in quarterly costs due to lost productivity, price increases on the goods it bought, and its warehouses ended in surplus capacity.


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