Amazon stock dropped nearly 11% in after-hours trading, to $2,561.50, after the company reported a net loss of $3.8 billion in the first quarter of 2022 due to slowed growth and high costs hampering the retail and entertainment giant.
The Q1 net loss included a pre-tax valuation loss of $7.6 billion in non-operating expense from its stock investment in Rivan, an electric vehicle maker.
The company posted revenue of $116.4 billion, up 7%, meeting expectations.
Amazon’s ad service revenues climbed to $7.88 billion, up 25% year over year. The segment includes sales of advertising services to sellers, vendors, publishers, authors and others through sponsored ads, display and video advertising. Sales at Amazon Web Services grew 36.5% from a year earlier to $18.44 billion, above analysts’ projections of $18.27 billion.
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” said Amazon CEO Andy Jassy said in a company statement. “With AWS (Amazon Web Services) growing 34% annually over the last two years, and 37% year-over-year in the first quarter, AWS has been integral in helping companies weather the pandemic and move more of their workloads into the cloud.
Continued Jassy, “Our Consumer business has grown 23% annually over the past two years, with extraordinary growth in 2020 of 39% year-over-year that necessitated doubling the size of our fulfillment network that we’d built over Amazon’s first 25 years—and doing so in just 24 months.”
Amazon closed its $8.5 billion acquisition of MGM in March, bringing MGM’s huge catalog of upwards of 4,000 film and 17,000 TV episodes into the Amazon fold. Jeff Bezos stepped down as Amazon CEO in July.
