NATIONAL NEWS

Amazon stock plunges as company reports nearly $4 billion loss

Apr 28, 2022, 5:15 PM | Updated: Jun 8, 2022, 3:16 pm
Bins move along a conveyor at an Amazon fulfillment center on Cyber Monday in Robbinsville, New Jer...
Bins move along a conveyor at an Amazon fulfillment center on Cyber Monday in Robbinsville, New Jersey, U.S., on Monday, Nov. 29, 2021. (Michael Nagle/Bloomberg/Getty Images via CNN)
(Michael Nagle/Bloomberg/Getty Images via CNN)

(CNN) — Amazon reported a significant loss in the first three months of the year, sending the company’s stock plunging.

The tech giant on Thursday said it had a net loss of $3.8 billion in the quarter ended March 31, a sharp drop in income from the same period last year, when it made an $8.1 billion profit. It was also a big miss from the $4.4 billion profit that analysts surveyed by Refinitiv had forecast.

The company attributed the loss largely to a $7.6 billion loss from its investment in electric automaker Rivian Automotive. Rivian, into which Amazon led a $700 million investment in 2019, has seen its stock plummet more than 75% since its blockbuster November 2021 IPO.

Amazon shares sank around 10% in after-hours trading following the results.

“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Amazon CEO Andy Jassy said in a statement.

Amazon’s overall revenue grew 7% from the same period last year to $116.4 billion, slightly beating analyst forecasts but slower than the 9% growth in the final months of last year. The company forecast that revenue growth would slow further next quarter, anticipating a growth rate of between 3% and 7%.

Jassy referenced Amazon’s breakneck growth in its consumer business during the pandemic, and the “doubling” of the company’s fulfillment network in the last two years.

“Today, as we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network,” he added. “This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions.”

The company also announced that Prime Day, its annual sales bonanza, will take place this July in more than 20 countries.

In an earnings call, Amazon’s chief financial officer, Brian Olsavsky, said higher inflation, fuel prices and labor constraints added $2 billion to costs compared to last year.

“The cost to ship an overseas container has more than doubled compared to pre-pandemic rates,” he said. “The cost of fuel is approximately one and a half times higher than it was even a year ago.”

The rise of the Omicron variant towards the end of 2021 led to “a substantial increase” in employees going on leave, prompting Amazon to increase hiring to make up for the absences, Olsavsky said. But as workers returned when the variants subsided, “we quickly transitioned from being understaffed to being overstaffed,” he added. That resulted in “lower productivity” adding another $2 billion in costs, he said.

Amazon’s earnings hit comes as the company continues to face pressure from its warehouse employees over issues such as pay and working conditions. Workers at a Staten Island, New York, warehouse voted to form the e-commerce giant’s first-ever US labor union earlier this month. Amazon has since filed an appeal, calling for a do-over of the entire vote.

A separate Amazon union election in Bessemer, Alabama, also concluded recently with the results too close to call.

Both union efforts grew from worker frustrations with Amazon’s treatment of workers amid the pandemic and were also motivated in part by increased national attention to racial justice issues and labor rights.

Amazon subsequently announced it would conduct a racial equity audit led by former US Attorney General Loretta Lynch.


The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

KSL 5 TV Live

Top Stories

National News

Bodycam video released by authorities shows the good Samaritan trying to help the man on the tracks...
Tavleen Tarrant, CNN

Good Samaritan, NYPD officers rescue man from subway tracks moments before train arrives

A good Samaritan, who was at the right place at the right time, and a team of New York City officers who rushed on scene rescued a man who fell on the subway tracks just seconds before an incoming train arrived, police said.
1 day ago
"White Christmas" is a movie that has a lot of behind-the-scenes lore. (Paramount/Kobal/Shutterstoc...
AJ Willingham, CNN

The secrets behind your favorite Christmas movie classics

Watching Christmas movies is a whole tradition unto itself. Get to know some of the fascinating stories behind the stories so you can watch your old favorites with fresh eyes.
1 day ago
A memorial is seen at the site of a fatal shooting in a Walmart on November 23, 2022 in Chesapeake,...
Ben Finley and and Matthew Barakat, Associated Press

Walmart shooter left ‘death note,’ bought gun day of killing

Authorities investigating the fatal shootings of six people at a Walmart said that the shooter bought the gun just hours before and left a note with grievances against coworkers on his phone.
1 day ago
A Ford sign sits outside of a dealership on January 25, 2022 in Chicago, Illinois. Ford Motor Co. a...
Associated Press

Ford recalls over 634K SUVs due to fuel leaks and fire risk

Ford is recalling over 634,000 SUVs worldwide because a cracked fuel injector can spill fuel or leak vapors onto a hot engine and cause fires.
1 day ago
The Twitter headquarters signage as seen on 10th Street on November 4, 2022 in San Francisco, Calif...
Kelvin Chan, AP Business Writer

Musk plans to relaunch Twitter premium service, again

Elon Musk says that Twitter plans to relaunch its premium service that will offer different colored check marks to accounts next week.
1 day ago
Discount signs are displayed on products at a Macy's store during Black Friday on November 25, 2022...
Anne D'Innocenzio, AP Retail Writer

Inflation hovers over shoppers heading into Black Friday

Black Friday marks a return to familiar holiday shopping patterns, but inflation is weighing on consumers.
1 day ago

Sponsored Articles

house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 reasons you may want to consider apartment life over owning a home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to choose what MBA program is right for you: Take this quiz before you apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t let a ransomware attack get you down | Protect your workplace today with cyber insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Hand turning a thermostat knob to increase savings by decreasing energy consumption. Composite imag...
Lighting Design

5 Lighting Tips to Save Energy and Money in Your Home

Advances in lighting technology make it easier to use smart features to cut costs. Read for tips to save energy by using different lighting strategies in your home.
Portrait of smiling practitioner with multi-ethnic senior people...
Summit Vista

How retirement communities help with healthy aging

There are many benefits that retirement communities contribute to healthy aging. Learn more about how it can enhance your life, or the life of your loved ones.
Amazon stock plunges as company reports nearly $4 billion loss