Amazon.com Inc. reported a loss of nearly $4 billion in the first quarter of 2022, as its investment in Rivian Automotive Inc. wiped away all of its profit and more, and delivered a disappointing forecast Thursday, sending shares down in late trading.
reported a first-quarter loss of $3.8 billion, or $7.56 a share, after the e-commerce giant reported earnings of $15.79 a share a year ago. Revenue increased to $116.44 billion from $108.52 billion in the same period a year ago. Analysts on average expected earnings of $8.35 a share on sales of $116.45 billion, according to FactSet.
Amazon’s earnings were damaged by the same dynamic that helped the company at the end of 2021: The performance of Rivian stock.
Rivian’s initial public offering added $11.8 billion to Amazon’s bottom line in the fourth quarter, but the stock dropped more than 50% in the first quarter and wiped away $7.8 billion from first-quarter profit. Without that cost, Amazon still would have come in under analyst estimates — net income would have been roughly $4 billion, while analysts were expecting $4.47 billion, and operating income (which does not count the Rivian decline) was $3.67 billion, while analysts on average were projecting $5.32 billion, according to FactSet.
Amazon shares fell more than 10% in after-hours trading immediately following the release of the report, after closing with a 5.1% gain at $2,891.93. The stock has held up better than most so far this year, declining 13.3%, nearly in-line with a 12.2% decline in the S&P 500 index
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Chief Executive Andy Jassy said in a statement included with the results Thursday.
Amazon’s cloud-computing division — Amazon Web Services, or AWS — counteracted the Rivian effect while continuing to be the biggest driver of profit for Amazon. Amazon reported AWS operating profit of $6.52 billion on revenue of $18.44 billion; analysts on average were expecting AWS sales of $18.34 billion, according to FactSet.
Amazon’s e-commerce business continued to report losses, with an operating loss of $1.57 billion on sales of $69.24 billion in North America, and an operating loss of $1.28 billion on sales of $28.76 billion internationally.
For the second quarter, Amazon executives guided for an operating loss of $1 billion to a profit of $3 billion on net revenue of $116 billion to $121 billion. Analysts on average were expecting operating income of $6.78 billion on revenue of $125.33 billion heading into the report, according to FactSet. Amazon announced that its annual Prime Day sale will be in July, the third quarter, as some analysts expected; other analysts projecting a second-quarter Prime Day could be a factor in the shortfall.