For the first time since 2014: Amazon received the weakest net profit and a record annual loss

The world’s largest online retailer Amazon.com Inc reported its lowest fourth-quarter net profit since 2014, leading to a record annual loss. The company’s shares fell in price during additional trading on Thursday.

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As reported in the press release, net profit in October-December fell to $278 million, or 3 cents per share, compared to a record $14.32 billion, or $1.39 per share, for the same period a year earlier.

The drop in profit was due to a decrease in the value of the shares of the automotive startup Rivian, in which Amazon invested. In addition, the company reported a large amount of expenses related to recently announced layoffs.

Meanwhile, revenue grew by 9% and reached $149.2 billion against $137.41 billion a year earlier.

Analysts polled by FactSet, on average, estimated the company’s profit at the level of 17 cents per share on revenue of $145.71 billion.

The operating profit of the Amazon Web Services (AWS) cloud service in the last quarter decreased to $5.2 billion from $5.3 billion, revenue increased by 20% to $21.38 billion. Experts on average predicted the profit of the division in the region of $5.73 billion , revenue — $21.85 billion.

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Sales in North America in the past quarter increased to $93.36 billion from $82.36 billion a year earlier, abroad – decreased to $34.46 billion against $37.27 billion in October-December 2021.

At the end of 2022, Amazon recorded a net loss of $2.7 billion, compared to a net profit of $33.36 billion a year earlier.

The company posted an annual loss for the first time since 2014, and it hasn’t lost more than $1.4 billion an hour since going public in 1997, according to FactSet data.

Hourly revenue increased by 9% to $513.98 billion against $469.82 billion a year earlier.

In the first quarter of 2023, Amazon expects an operating profit in the range of zero to $4 billion, compared to $3.7 billion in the same quarter a year earlier, and revenue is expected to increase by 4-8% to $121-126 billion.

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Amazon shares fell 5.1% in after-hours trading on Thursday after the report was released. Since the beginning of this year, the company’s capitalization has increased by 34.4% (up to $1.07 trillion).

Source: Ministry of Finance

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