Amazon Posts Biggest Annual Loss on Record, Poor Fourth-Quarter Sales

The stock price for tech and retail giants Amazon After posting mixed results in the fourth quarter, the company reported its first unprofitable holiday season since 2014.

Thursday, the Jeff Bezos-headed company reported a net income of $278 million for the quarter, or $0.03 per diluted share, compared with $14.3 billion, or $1.39 per diluted share, in the fourth quarter of 2021.

Net sales increased to $149.2 billion from $137.41 billion in the year-ago quarter. According to the average analyst estimate, earnings were $0.17 per share for sales of $145.71 trillion. FactSet.

For the full year, Amazon posted a net loss of $2.7 billion, or $0.27 per diluted share, compared with a net income of $33.4 billion, or $3.24 per diluted share in 2021.

2014 was the last time Amazon lost profit.

However, revenue for the full year was $513.98 billion, up 9 percent year over year, from $469.82 billion a year ago, and far surpassing the company’s Guidance issued in its third-quarter results, which said it expected net sales to be between $140.0–148.0 billion, or to grow between 2–8 percent compared with fourth quarter 2021.

Amazon Hit by Rivian Woes

The losses appeared to be driven largely by Amazon’s huge investment in the electric automaker Rivian, which cost the company $2.3 billion in net income in the quarter.

Rivian’s value has dropped more than 80 percent In the last year, there have been supply-chain problems and production issues. According to filings (PDF) with the U.S. Securities and Exchange Commission (SEC).

Another area that appeared to perform less than spectacularly last year was Amazon’s international segment, which saw sales decreased 8 percent year over year, to $34.5 billion.

Meanwhile, AWS, Amazon’s cloud computing platform, saw an operating income of $5.2 billion in the fourth quarter, compared with an operating income of $5.3 billion in the fourth quarter of 2021.

The latest results are the result of Amazon’s November announcement that it would be initiating layoffs. “current macroeconomic environment” which has impacted a string of tech giants, with Amazon CEO Andy Jassy planning to reduce the company’s headcount by 18,000 in 2023, according to a Statement Visit its website.

Over the past 12 month, the online retailer also closed a number of physical stores, including bookstores and pop up shops.

The company was founded on January 19. Announcement it will be discontinuing its charity program called AmazonSmiles in further efforts to cut costs.

Amazon Cites Macroeconomic Environment

In the midst of volatility “macroeconomic environment” and fears of an impending recession on the horizon, Amazon forecasts operating income of between $0 and $4.0 billion this quarter, compared with $3.7 billion in the first quarter of 2022.

Net sales, meanwhile, are expected to be between $121.0 billion and $126.0 billion, or to grow between 4 percent and 8 percent in the first quarter compared with the first quarter of 2022.

Analysts were a>=”https://www.marketwatch.com/amp/story/amazon-stock-falls-after-earnings-miss-shows-worst-annual-loss-on-record-least-profitable-holiday-quarter-since-2014-11675372658″>expecting an operating income of $4.04 billion on sales of $125.09 billion, according to research firm FactSet.

Jassy, despite mixed results, stated in a statement the company is “encouraged” by the continued progress it’s making with its cost-reducing efforts.

“In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon,” Jassy spoke. “The vast majority of total market segment share in both global retail and IT still reside in physical stores and on-premises data centers; and as this equation steadily flips, we believe our leading customer experiences in these areas along with the results of our continued hard work and invention to improve every day, will lead to significant growth in the coming years.”

“When you also factor in our investments and innovation in several other broad customer experiences (e.g., streaming entertainment, customer-first health care, broadband satellite connectivity for more communities globally), there’s additional reason to feel optimistic about what the future holds,” Jassy was added.