Amazon reported its first quarterly loss since 2015 on Thursday, its money-making juggernaut stalled by a slowdown in pandemic-induced online shopping and a huge write-down of its investment in an electric-vehicle startup.
The Seattle-based e-commerce giant’s stock fell 9% in after-hours trading.
Amazon reported a loss of $3.84 billion, or $7.56 a share, for the first three months of the year. A year ago, it reported a profit of $8.1 billion, or $15.79 a share, for the first quarter. Wall Street analysts expected a profit of $8.35 a share in the latest quarter, according to FactSet.
The ocean of red ink in Amazon’s report came mostly from the company’s accounting for a $7.6 billion loss in value of its stock investment in Rivian Automotive. Rivian went public in late 2021 and its stock traded at close $180 at one point. It closed Thursday at $32.18. Ford Motor Co. reported a similar write-down of the value of its Rivian investment Wednesday. Meanwhile, sales at Amazon’s cloud-computing business, which helps power the online operations of Netflix, McDonald’s and other companies, grew 37% in the quarter. And sales in its advertising business, where brands pay to get their products to show up first when shoppers search on Amazon’s site, rose 25%. Still, the slowdown in online spending is real and broad-based. While in-store sales rose, March is the first month to show decline in online sales since the pandemic began, according to Mastercard SpendingPulse, which tracks spending made over the Mastercard payments network and survey estimates for other payments made with cash and checks.
Amazon prospered during the COVID-19 pandemic as homebound people eager to limit human contact turned online to purchase what they need. But growth has slowed as vaccinated Americans feel more comfortable going out. According to the e-commerce research firm MarketPlace Pulse, the value of goods sold on Amazon last year grew by half the rate compared to 2020. Like many others, Amazon is dealing with pressure from inflation and supply-chain issues. In the past two years, Amazon’s Chief Financial Officer Brian Olsavsky said the company has doubled the size of its operations and nearly doubled its workforce. He said labor shortages and a lack of physical space are no longer major issues, but the company continues to face a variety of pressures such as increased shipping costs.