E-commerce giant Amazon recently reported fourth-quarter sales beating analysts’ estimates, but reported its first unprofitable year since 2014 due largely to its fizzling investment in electric truck builder Rivian. The company’s sluggish first-quarter guidance has caused its stock to drop more than four percent in morning trading.
CNBC reports that e-commerce giant Amazon recently reported higher-than-expected revenue for the fourth quarter, but the stock fell after the company provided first-quarter guidance that fell short of analysts’ expectations.
Workers pack and ship customer orders at the 750,000-square-foot Amazon fulfillment center on August 1, 2017 in Romeoville, Illinois. (Photo by Scott Olson/Getty Images)
In its 25 years as a publicly traded company, the e-commerce behemoth experienced its slowest year of growth. Blaming inflationary pressures and rising rates that affect consumer spending, the company’s annual revenue increased by nine percent. In 2022, the stock price nearly lost half of its value.
According to Refinitiv estimates, the company reported fourth-quarter revenue of $149.2 billion, exceeding the predicted $145.42 billion. The company’s advertising revenue came in at $11.56 billion which also exceeded the $11.38 billion forecast.
Amazon CEO Andy Jassy, who took over for founder Jeff Bezos in July 2021, issued a cautious outlook for the first quarter despite these encouraging results. The company anticipates sales to range between $121 billion and $126 billion, with revenue expected to increase by four to eight percent year-over-year. Analysts, however, had projected sales of $125.1 billion. According to Jassy, the company is currently dealing with an unstable economic climate, but she is still upbeat about Amazon’s long-term prospects.
Jassy has spent the past year trying to cut costs at Amazon, including laying off 18,000 employees from the corporate workforce and putting a hiring freeze in place for corporate positions. In an effort to rein in rising costs, the company has also shelved some projects and put the expansion of its warehouse on hold. According to Jassy, the business is reducing retail costs and is “encouraged by the continued progress.”
Amazon’s cloud division, AWS, experienced a slowdown in the fourth quarter, growing only 20 percent as opposed to 27.5 percent in the previous quarter. As consumers have been forced to reduce discretionary spending due to rising gas and food prices, the company has been dealing with declining sales in its online stores segment, which decreased two percent year-over-year. The e-commerce boom caused by the pandemic has also slowed down as customers are increasingly visiting traditional brick-and-mortar stores.
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan