After announcing it was laying off 18,000 people earlier this year, Amazon has done it revealed, Feb. 2, revenue of $149.2 billion in the recent quarter. A result higher than analysts’ estimates. However, investors are concerned about the slowing growth of the cloud division of the e-commerce giant, Amazon Web Services (AWS).
The figure that hides the forest
Market experts had expected a turnover of around 145 billion dollars, the American giant finally surpassed it by 4 billion, an increase of 9% compared to 2021. Internationally, revenues increased by 5% to $34.5 billion.
However, there are still several black spots. The company reported a net loss for the first time since 2014. Amazon lost $2.7 billion for full-year 2022 on revenue of $514 billion. This shortfall stems from an estimated $3.9 billion investment loss in automaker Rivian, which specializes in electric vehicles. In the second half of 2022, the company saw its share price decline. In question: the current economic context and the problems of the supply chains that have scared investors. Amazon aims to use Rivian electric vans to deliver its products.
AWS, usually the company’s economic engine, doesn’t make up for Rivian’s failure. The cloud subsidiary saw its sales growth drop sharply this quarter compared to the same period last year, dropping from 40% to 20%, still reaching $21.4 billion. The economic backdrop is forcing customers to cut cloud costs, according to Amazon CFO Brian Olsavsky.
In its press release, the e-commerce giant made conservative forecasts for the current quarter of 2023: revenues between 121 and 126 billion dollars, instead of the 125 billion expected by financial analysts. The group also counts on an operating profit of between 0 and 4 billion dollars, of which the market expects the maximum amount. Following the release of the results, the company’s stock dropped 6% as of close of trading.
Despite the imminent drop in profits, the company’s future should not be jeopardized.” In the near term, we face an uncertain economy, but remain very optimistic about the long-term opportunities for Amazon. Chief Executive Officer Andy Jassy said in a statement accompanying the results. With cash flow reaching $46.8 billion, Amazon, barring major disappointments, will survive the grim economic backdrop.
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