Amazon (AMZN) shares rose 12% after the e-commerce company reported better-than-
expected second-quarter earnings and issued strong forward guidance.
Amazon posted an earnings per share (EPS) loss of $0.20 U.S. However, the Seattle-based
company announced that its revenue came in at $121.23 billion U.S. compared to $119.09
billion U.S. that was expected on Wall Street, according to Refinitiv data.
Amazon Web Services reported revenue of $19.7 billion U.S. versus $19.56 billion U.S. that
was anticipated. Advertising revenue amounted to $8.76 billion U.S. compared to $8.65 billion
U.S. that was expected by analysts.
Perhaps most consequential, Amazon said it expects to post third-quarter revenue of between
$125 billion U.S. and $130 billion U.S., representing growth of 13% to 17% on an annualized
basis. Analysts were forecasting Q3 sales of $126.4 billion U.S.
Amazon has been struggling in recent months with higher costs, as a pandemic-driven
expansion left the company with too many workers and too much warehouse capacity.
Amazon said it reduced its global workforce by 1.52 million employees by the end of the second
quarter after almost doubling its worldwide headcount during the COVID-19 pandemic.
The company added that it plans to continue hiring engineers for Amazon Web Services and
advertising but will be cautious about hiring in other areas for the remainder of this year.
Additionally, Amazon recorded a $3.9 billion U.S. loss on its investment in electric car start-up
Rivian (RIVN) after that stock fell 49% in the second quarter. That brings Amazon’s total loss on
its Rivian investment to $11.5 billion U.S.
Because of the Rivian write down, Amazon recorded an overall loss of $2 billion U.S. in the
second quarter.
Amazon’s core e-commerce business also suffered a loss in the quarter as online sales
continue to slow coming out of the pandemic. The company’s online stores segment declined
4% on a year-over-year basis. Physical store sales continue to rebound though, growing 12%
from the year earlier period.
Amazon’s ad business grew 18% in Q2, and sales at Amazon Web Services, its cloud
computing unit, jumped 33% from a year earlier to $19.74 billion U.S., which was above the
$19.56 billion U.S. forecast on Wall Street.
Amazon stock is down 28% this year and trading at $122.28 U.S. per share. The company split
its stock on a 20-for-1 basis in June of this year.
