Amazon made a boat full of money during the first quarter of 2022. But investors, who had become accustomed to Amazon’s rocket-like trajectory during the pandemic, have not quite adapted to the fact that it is no longer accelerating so quickly.
Despite sales of $116.4 billion from January to March this year — an increase of nearly 8 billion year over year — Amazon’s stock plunged in after-hours trading, falling about 10 percent before slowing down a bit. stabilized higher.
The problem wasn’t that Amazon underperformed in the first quarter, but that Amazon predicted a slower second quarter than analysts had hoped. Analysts wanted Amazon to expect revenue of $125.5 billion, according to CNBCbut instead, the company only expects $116 billion to $121 billion in revenue.
This isn’t a huge problem in the aggregate of things, but it does illustrate the communication issues Amazon is currently facing. The company saw such rapid growth in the early stages of the pandemic that it was only… good growth at the moment is seen by investors as a sign of slowing progress.
Amazon CEO Andy Jassy tried to raise expectations in his first letter to shareholders earlier this month: “We achieved the equivalent of three years’ forecasted growth in about 15 months.”
However, analysts are not wrong that things at Amazon are slowing dramatically. The company reported 44 percent year-over-year growth in net sales for Q1 2021 and just 7 percent growth for Q1 2022. That’s clearly a lot lower — Compound Capital Advisors says: this quarter marks Amazon’s slowest Q1 growth ever. Amazon also reported its first quarterly loss since 2015due in large part to a $7.6 billion loss on its investment in electric vehicle manufacturer Rivian, which saw its stock drop more than half this year.
Amazon is now focused on “improving productivity and cost efficiency across our fulfillment network,” says Jassy. But he warns that “this may take a while”.
The company also announced today that it would be holding Prime Day in July this year, after holding it in June last year. That will push the revenue increase from Amazon’s invented vacation into the third quarter of 2022.
Amazon is not alone in dealing with shareholder problems this year. if Bloomberg‘s Steve Matthews points outall FAANG companies see dips: