Amazon, AMZN, Earnings, Inflation, E-Commerce – Talking Points
- Amazon shares sink more than 10% in after-hours trading on weak guidance
- Inflation and shipping costs seen eating into profits amid economic concerns
Amazon shares sank more than 10% in after-hours trading after the e-commerce giant posted its first-quarter earnings report. The concern weighing on prices appears to be weak guidance amid soaring inflation and higher shipping costs. Amazon sees its first-quarter net sales at $116 billion to $121 billion, well below the consensus estimate of $125.01 billion.
The company’s Q1 operating income crossed the wires at $3.7 billion, missing the estimated $5.42 billion that analysts expected. A $7.6 billion loss was recorded on its Rivian electric vehicle investment. Rivian lost more than 50% of its market capitalization through the earning’s period. Amazon Web Services (AWS) performed well, posting net sales of $18.44 billion versus the expected $18.25 billion, but that wasn’t enough to assuage investors against its poor performance in its e-commerce segment.
First-quarter online store net sales for Q1 were at $51.13 billion, missing the estimated $51.5 billion, per Bloomberg. Subscription services also missed estimates, posting net sales of $8.41 billion versus $8.55 billion. That contributed to the big -7.56 miss on earnings per share (EPS). Investors will be keyed into the earnings call starting shortly to gauge how Amazon plans to attack higher shipping costs and inflationary pressures.
Amazon One-Minute Chart
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**Check out Apple's earning report here**
--- Written by Thomas Westwater, Analyst for DailyFX.com
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