Amazon shares rose more than 10% in afternoon trading after the Seattle tech giant beat earnings estimates for its fiscal second quarter.
“Despite continued inflation in fuel, energy and transportation costs, we are making progress on the more controlled costs we mentioned last quarter, particularly as we improve the productivity of our fulfillment network,” Amazon CEO Andy Jacey said in a statement.
Second-quarter revenue came in at $121.2 billion, beating estimates of $119 billion and representing a 7 percent year-over-year increase. That was the fastest year-over-year growth rate in the first quarter — the slowest rate for Amazon in two decades.
The company posted a loss of $2 billion, or $0.20 per share. The net loss included a pre-tax loss of $3.9 billion from the company’s investment in automaker Rivian. Without Rivian’s impact, Amazon would have made $1.9 billion in profit.
Operating income came in at $3.3 billion, down from $7.7 billion in the previous quarter, but beating analysts’ estimates.
The company’s guidance, a closely watched barometer of the economy, forecast revenue to grow 13 percent to 17 percent and range from $125 billion to $130 billion in the third quarter. That’s down from $4.9 billion in operating income in the same quarter last year.
Inflation and other macroeconomic factors are weighing on a mess of companies, including Amazon rival Walmart, which cut profit guidance earlier this week. E-commerce giant Shopify said Tuesday it is cutting 10 percent of its workforce as revenue growth slows. Shopify recently predicted a continued surge in e-commerce led by the pandemic, but that bet has not paid off, with The Wall Street Journal reporting that inflation and a return to physical shopping will limit online shopping growth.
Earlier this year, Amazon said it added more warehouse space than needed to deal with the pandemic, boosting consumer sales and generating an additional $2 billion in spending in the first quarter.
Amazon shares fell nearly 30% amid a broader decline in tech stocks. The company’s 20-for-1 stock split took effect on June 6. Shares initially rose more than 5% but now trade at the same price of $120.
Here’s a quick rundown of the company’s financials for the second quarter.
Online stores: Revenue fell 4% year over year to $50.9 billion.
Amazon Web Services Amazon’s cloud business increased by 33% to $19.7 billion, with operating income of $5.7 billion, continuing to drive Amazon’s profits.
Shipping costs: Amazon’s shipping costs have ballooned in recent years as the company pushed for one-day shipping to accelerate shipping costs. During Q2, Amazon spent $19.3 billion on shipping, a 9 percent increase.
physical stores; The division, which includes Whole Foods and Amazon Go stores, posted revenue of $4.7 billion, up 12 percent.
Advertisement: The company began spending on its growing advertising arm, which brought in $8.7 billion in revenue in the quarter, up 18 percent from a year ago.
Number of Heads: Amazon now employs 1.52 million people, up 14% year over year, but down from the fourth quarter, the company’s biggest quarterly employment decline in history. That figure does not include seasonal and contract workers.
Main: Subscription service revenue, which includes Prime memberships, came in at $8.7 billion, a 10 percent increase. Amazon announced earlier this year that it increased the annual Prime membership fee by $20, up from $119 to $139, and this week announced the increase in membership fees in Europe.
