Bezos Bummer: Amazon Reports Almost $4 Billion Loss, Stock Nosedives

E-commerce giant Amazon has suffered a significant drop in share value following a recently reported loss in the first quarter of 2022 of $3.8 billion. As of Friday afternoon, Amazon shares are down more than 15 percent in intraday trading.

CNBC reports that shares of Amazon dropped by as much as 15 percent on Friday following a poor revenue outlook and major losses reported in the first quarter of 2022. The company projects revenue between $116 billion and $121 billion in the second quarter, lagging behind the $125.5 billion average analyst estimate. The second-quarter revenue growth forecast predicts a dip to a range of three to seven percent from a year earlier, another slowdown compared to a year earlier when revenue increased by seven percent.

(Photo by KENA BETANCUR/AFP via Getty Images)

Amazon lost $3.8 billion in the first quarter compared to a profit of $8.1 billion at this time last year. Amazon’s investment in the electric SUV firm Rivian reportedly weighed heavily on its profits. William Blair analysts, who have an outperform rating on Amazon shares, said in a note to clients on Thursday:

While sales were short of expectations by a mere $6 million, the bigger headline was the company’s first quarterly loss since 2015, at a loss per share of $7.56, or nearly $16.00 shy of the Street’s earnings per share expectations

Under the hood, the company reported an $8 billion pretax loss related to its investment in Rivian Automotive. Recall the company reported a $12 billion benefit in the prior quarter related to the investment. We estimate the company’s earnings per share excluding the investment-related loss would be roughly $3.40, still 60% below consensus as the company continues to face headwinds related to shipping, labor, excess capacity, and tough prior-year comparisons.

Truist Securities analyst Youssef Squali remains positive on the future of the company, however, stating: “We should start seeing material improvement to labor and fixed cost efficiency in 2H22, starting with Prime Day in July and then in the seasonally strong 4Q22.”