Amazon Inc (AMZN) shares suffered their biggest opening bell decline in nine years Friday after posted a surprise first quarter loss, thanks in part to a $7.6 billion write down on its investment in EV maker Rivian (RIVN), while forecasting softer-than-expected near-term profits.
Amazon said late Thursday that its second quarter loss was pegged at $3.8 billion, or $7.56 per share, down from a profit of $15.79 per share over the same period last year and notably short of the Street consensus forecast of $8.07 per share.
Revenues rose 7% from last year to $116.4 billion, just ahead of analysts' estimates of a $116.30 billion tally, but the slowest year-on-year growth in more than a decade. Ad services revenues were $7.87 billion and Amazon Web Services contributed $18.44 billion, rising 36.6% from last year.
Operating expenses were up 13.2% at $112.78 million, Amazon said, linked largely to labor and shipping cost increases.
Looking into the current quarter, Amazon said it sees operating income of between -$1 billion to +$3 billion on revenues in the range of $116 billion to $121 billion, compared to the Refinitiv forecast of around $125 billion.
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” said CEO Andy Jassy. "Today, as we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network. We know how to do this and have done it before."
"This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020,” he added
Amazon shares were marked 12.6% lower in mid-day Friday trading to change hands at $2,527.05 each, a move that would extend the stock's year-to-date decline to around 2.6%. The shares hit a two-year low of $2,518.01 each earlier in the session.
Earlier this year, Amazon's unveiled plans for its first stock split in more than 20 years that is stated to begin trading in June.
Amazon said shareholders of record on May 25 will receive 19 extra shares of the group for each one held. Trading is expected to begin on a split-adjusted basis on June 6
The split follows a similar move by Google parent Alphabet GOOGL earlier this year, likely to take place in July, that would leave investors with one Google stock and a dividend payment of 19 more shares, all priced at around $160 each.
Apple (AAPL) and Tesla (TSLA) have also executed splits over the past two years, and today's move makes Amazon stock a more attractive and attainable proposition for retail investors who, powered by a wave of mobile trading apps and zero-commission brokers, suddenly find their collective power capturing the attention of the biggest companies in the world.
