Amazon swung to a loss in the first quarter as expenses related to its investment in Rivian Automotive offset revenue that narrowly beat expectations.
The e-commerce giant posted a loss of $7.56 per share, well off of the $8.36 profit per share, analysts had forecast. The performance was far from $15.79 earnings per share the company posted in the same quarter last year.
Revenue rose 7% from a year ago to $116.4 billion. That edged out the $116.3 billion forecast by analysts, according to Yahoo.
Amazon invested in Rivian before it went public and now owns stock in the company. The electric truck maker went public in November 2021 at $78 a share. The company’s shares initially surged, reaching a high of around $180 before starting to slide. It now trades at about $32 a share.
The drop in Rivian’s stock price generated a $7.6 billion valuation loss for Amazon and pushed the company to a loss. Ford Motor, another Rivian investor, also posted a loss earlier this week in part because of its stake in the company.
The earnings performance comes after Amazon warned in its annual shareholder letter that costs were cutting into its margins. Fuel costs, which have soared since Russia invaded Ukraine, were cited as a particular culprit. Amazon’s stock price fell by more than 9% in after-hours trading after the company released its report.
Amazon indicated that strong growth is unlikely to return soon. The company forecast operating income, which excludes taxes, interest payments and some other costs, in the second quarter would range between a loss of $1 billion and a profit of $3 billion. A year earlier the company posted $7.7 billion in operating income.
The company indicated that Prime Day, its annual shopping holiday, would likely take place in the third quarter. Last year Prime Day took place in late June.
