Gafam’s publications will remain very contrasting in the first quarter of 2022, and the stock exchange will not remember Amazon well. Shares of the e-commerce and cloud services group fell 10% on Wall Street on Friday in response to announcements, including disappointing forecasts for the current three months. This leads to a decrease in the title by more than 20% since the beginning of the year.
In the first quarter, Amazon’s turnover increased by 7% year on year to 116.4 billion dollars. That’s slightly better than the 116.3 billion planned by consensus of analysts. The loss of $ 7.56 per share, recorded in late March, is a real surprise compared to the expected earnings per unit of $ 8.36 and, above all, from $ 15.79 per share, which were issued a year earlier. The (large) difference due to the depreciation of $ 7.6 billion in the value of the share of electric car manufacturer Rivian, has halved in a year.
A new loss in the second quarter?
A non-repeating element, “one shot”, analysts say, which is not in doubt business model which has proven itself. But they clearly do not like the forecasts for the second quarter. In the three months to the end of June, Amazon expects revenues in the range of 116 to 121 billion dollars. In the worst case, the group may see a decline in its accounts compared to the first quarter … The upper limit of forecasts, in any case, is below 125.5 billion, which was determined by consensus.
Add to this the fact that profits should decline within one year or even be in the red again. In fact, Amazon expects an operating profit of $ 3 billion and a deficit of $ 1 billion. We are far from the 7.7 billion recorded in the second quarter of 2021…
This is an increase in fuel prices, which increases the cost of supplies and a surge in inflation, which encourages consumers to be careful in their spending. To offset these additional costs, Amazon raised the price of its Prime subscription in the United States earlier this year ($ 20 more per year). It has also just begun levying a surcharge of 5% on traders who use its warehouses in the US to mitigate the effects of rising prices.
“Losing money in the United States… unimaginable”
Amazon’s powerful cloud computing division (AWS) has shown that quarterly revenue continues to grow 37% to 18 accounts, $ 4 billion, slightly above consensus expectations. However, this is not enough to compensate for the low rates of e-commerce, even if the branch is much better margin.
For Brian Jarbro in Edward Jones, “ Amazon has to prove to investors that by slowing down costs, they can increase profits. Today’s figures are quite disappointing “. This is, above all, the analyst believes Losing money in the United States has become unthinkable for the company “. At one time, the e-commerce giant may have seen too much. Given the growing needs of the pandemic, warehousing capacity now exceeds demand and too many workers. Amazon is the second largest private employer in the United States (read also: Amazon, everyone wants their cloud… and work there!) and has hired about 780,000 people in the last two years, bringing its workforce to over 1.6 million.The group has also raised salaries and paid bonuses to recruits, sometimes even sending semi-empty vehicles so that customers receive parcels on time.