// Amazon posts its slowest quarterly growth in years and its first quarterly loss since 2015
// It warned there may be more losses ahead and expects operating income between a loss of $1bn and a gain of $3bn, compared with $7.7bn in second quarter of 2021
Amazon posted its slowest-ever revenue growth in the first quarter and its first loss since 2015 amid a drop in online retail sales and rising costs.
The results fell far short of Wall Street’s expectations and the news sent the tech giant’s shares falling by 10% in after hours trading.
The company reported $116.4 billion in revenue in the first three months of the year, up 7% from a year earlier.
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For the same quarter last year, Amazon’s sales increased 44% to $108.5bn. It lost $3.8bn for the quarter compared with a profit of $8.1bn during the same period a year ago and its costs to sell those items also increased.
The company warned there may be more losses ahead.
For the current quarter, Amazon expects operating income between a loss of $1bn and a gain of $3bn, compared with $7.7bn in second quarter of 2021.
Amazon lost $3.8 billion in the quarter, and its stake in electric vehicle company Rivian Automotive was largely to blame for the loss.
Amazon, which owns almost 20% of the company lost $7.6bn after shares in the electric vehicle collapsed, falling by more than 50%.
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” said Amazon chief executive officer Andy Jassy.
The losses also stemmed from Amazon’s consumer businesses in North America, with operating expenses for its consumer business in North America increasing 16%even as sales in the region grew only 8% in the quarter.
“Our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network,” said Jassy.
“We know how to do this and have done it before. This may take some time, particularly as we work through ongoing inflationary and supply chain pressures.”
Amazon’s chief financial officer Brian Olsavsky said incremental costs from inflation, warehouse capacity exceeding demands and other issues had cost the company about $6bn over the quarter.