Amazon.com on Thursday expected sales to be lower than Wall Street estimates, amid a reluctance from customers for non-core spending amid economic uncertainty and fierce competition for its cloud computing activities.
The company’s sales in North America, its largest market, increased 8 percent, while operating expenses rose 16 percent to $ 71 billion, resulting in an operating loss of $ 1.6 billion per unit in the first quarter of the year.
Revenue for the Amazon Web Services unit rose 37 percent to $18.4 billion, slightly more than analysts’ estimates.
The world’s largest online retailer forecast net sales of between $116 billion and $121 billion in the second quarter.
Analysts had expected $125.48 billion, according to IBES data from Refinitiv.
Amazon shares fell as much as 10% in following-hours trading Thursday following the company released revenue forecasts that fell short of analysts’ estimates.
Loss per share was $7.38 versus expected profit of $8.36.
On the front, revenue came in at $7.88 billion, versus the $8.17 billion forecast.
Amazon posted a $7.6 billion loss on its investment in Rivian following shares of the electric car company lost more than half their value this quarter. This resulted in a total net loss of $3.8 billion.
In addition, revenue at Amazon increased 7% during the first quarter, compared to an expansion of 44% in the same period last year. It represents the slowest rate in any quarter since the dotcom crash in 2001 and the second consecutive period of single-digit growth.
Forecasts for the second quarter indicate that growth may slow further, to between 3% and 7% from the previous year. Amazon said it expects revenue this quarter of $116 billion to $121 billion, below the average analyst estimate of $125.5 billion, according to Refinitiv. (agencies)
