Amazon Earnings: AMZN Sinks After the Bell as Inflation Eats at Outlook
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.
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--- Written by Thomas Westwater, Analyst for DailyFX.com
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