Amazon shares tank after company posts weak revenue forecast
Expected Q2 revenue is $116 billion to $121 billion, versus $125.5 billion estimated
Shares of Amazon Inc (NASDAQ: AMZN) dropped by 9% after the company posted a weak revenue forecast which was not in line with analysts’ estimates.
The company’s revenue was reported as $116.44 billion as compared to the market estimate of $116.3 billion. Adjusted earnings were reported as $2.09 per share as compared to the analysts’ estimate of $1.68 per share.
Amazon’s total revenue increased 7% during the first quarter, marking the slowest rate for any quarter and the second continuous quarter for single-digit growth.
The company expects second-quarter revenue of $116 billion to $121 billion, falling short of analysts’ estimated $125.5 billion
Amazon CEO Andy Jassy attributed the dismal performance to the pandemic and war in Ukraine.
He added that the company is “squarely focused” on offsetting costs in its fulfillment network now that staffing and warehousing capacity are at normal levels.
Marking the losses
Amazon’s net loss was $3.8 billion in the first quarter, or $7.56 per diluted share, compared with a net income of $8.1 billion, or $15.79 per diluted share, in the first quarter of 2021.
The company recorded a $7.6 billion loss in the first quarter of 2022 after its stock investment, Rivian Automotive, Inc, lost more than half its market value in this quarter.
Amazon’s advertising revenue was $7.88 billion during the quarter, lower than analysts’ estimated $8.17 billion, but still grew at 23% year-over-year compared to Meta (NASDAQ: FB) and Alphabet (NASDAQ: GOOGL).
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Source: Amazon
