Amazon (AMZN) Q2 2022 earnings

Amazon Shares rose more than 12% in extended trading Thursday after the company report Q2 revenue was better than expected and offered an upbeat outlook.

Here’s how the company did it:

  • EPS: Lost 20 cents
  • Turnover: $121.23 billion versus $119.09 billion expected, according to Refinitiv

Here’s how Amazon’s other key segments performed during the quarter:

  • Amazon Web Services: $19.7 billion versus $19.56 billion expected, according to StreetAccount
  • Advertisement: $8.76 billion versus $8.65 billion expected, according to StreetAccount

Revenue growth of 7% in the second quarter topped estimates, bucking a trend among big tech peers, all of which reported disappointing results before Thursday. Apple, along with Amazon, has surpassed expectations.

Amazon said it expects Q3 revenue of $125 billion to $130 billion, a growth of 13% to 17%. According to Refinitiv, analysts had expected revenue of $126.4 billion.

Amazon is facing higher costs, as the pandemic-driven expansion leaves the company with too many workers and too much warehouse capacity.

Chief Executive Andy Jassy said: “Despite continued inflationary pressures in fuel, energy and transportation costs, we are making progress on the controllable costs we have proposed. updates last quarter, especially improving the productivity of our fulfillment network.

By the end of the second quarter, Amazon had cut 99,000 employees to 1.52 million after nearly doubling in size during the pandemic.

Amazon Be recorded a $3.9 billion loss on its investment in Rivian after the electric-car maker’s shares fell 49% in the second quarter. That brings the total loss of the investment this year to $11.5 billion.

Due to the Rivian crash, Amazon posted an overall loss of $2 billion for the quarter. Analysts’ EPS estimates vary considerably, making it difficult to compare actual results with a consensus number.

Rivian CEOs RJ Scaringe and Udit Madan stand in front of a new Amazon EV truck powered by Rivian. Amazon and Rivian announce their final custom Electric Delivery Vehicles (EDVs) to begin using them for customer deliveries, in Chicago, Illinois, July 21, 2022.

Jim Vondruska | Reuters

Amazon’s core e-commerce business continues to struggle when online sales are no longer as strong as they were during the peak of the Covid-19 shutdown. The company’s online store segment is down 4% year over year. Grocery store sales continued to recover year-over-year, up 17%.

Amazon’s advertising business was a bright spot in a not-so-dismal quarter for online advertising and shows the company is taking market share in one of its fastest-growing businesses.

Advertising revenue grew 18% during this period. FacebookMeanwhile, revenue fell for the first time and is forecast to decline further in the third quarter. In Alphabetad growth slowed to 12% and YouTube showed a significant deceleration to 4.8% from 84% a year earlier.

Among other leading technology companies, Microsoft also reported disappointing results this week. Apple Type in the top and bottom lineslift stocks in after-hours trading.

Amazon’s cloud segment continues to grow. Sell ​​at Amazon Web Services jumped 33% from a year earlier to $19.74 billion, higher than the $19.56 billion Wall Street expected.

Operating income, excluding investment-related losses, fell to $3.3 billion from $7.7 billion a year earlier. AWS generated operating income of $5.7 billion, accounting for all of Amazon’s profits plus some amounts for the period.

The upbeat results can also help improve the mood around Jassy, ​​who has replaced Jeff Bezos as CEO over a year ago. By Jassy first year at work has been marred by challenges, including an ongoing labor war, a market downturn, growing regulatory pressure and the departure of top talent.

He’s also been under pressure to prove he can return Amazon’s core retail business to the growth investors are used to seeing, a daunting task given the macro pressures that have led to it. companies face, such as soaring inflation and slowing consumer discretionary spending.

CLOCK: A First Look at Amazon and Rivian’s Delivery Electric Vehicles

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