E-commerce major Amazon.com, Inc's shares opened on a positive note, adding nearly $15 to the share price, which jumped 12 percent over the previous close to trade at $136.84 on the NASQAQ at 10.45 am local time (8.15 am IST).
The Associated Press reported that the e-commerce company's shares had ended Tuesday on $122.28 apiece after the company reported its second-consecutive quarterly loss, but its revenue topped Wall Street expectations, sending its stock sharply higher.
The Seattle-based e-commerce giant also said it is making progress in controlling some of the excess costs from its massive expansion during the COVID-19 pandemic. Amazon lost $2.03 billion, or 20 cents per share, in the three-month period ended June 30, driven by a $3.9 billion write-down of the value of its stock investment in electric vehicle start-up Rivian Automotive
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That compared to a profit of $7.78 billion a year ago. It posted a loss of $3.84 billion in this year's first quarter, its first quarterly loss since 2015, which was also marked by a large Rivian write-down. Analysts had been expecting a 12-cent profit in the latest quarter, according to FactSet.
But Wall Street was cheered by Amazon's $121.2 billion in revenue, topping expectations of $119 billion. The results came as the company attempts to navigate shifting consumer demand and higher costs, while curtailing the glut of warehouses it acquired during the COVID-19 pandemic. Shares in Amazon.com Inc. rose almost 14% in after-hours trading.
Bloomberg analysed the results and said Amazon showed that its e-commerce and cloud-computing businesses can churn out revenue even as consumers worry about inflation and the company gets serious about curtailing expenses.
While he focuses on rekindling sales, Chief Executive Officer Andy Jassy is determined to unwind a pandemic-era expansion that saddled Amazon with a surfeit of warehouse space and too many employees. Fulfillment expenses increased 14 percent to $20.3 billion, virtually the same as the previous three-month period, and less than analysts predicted.
At the same time, the former Amazon Web Services leader will spend money on the profitable market-leading cloud unit to take advantage of the potential for growth.
“Despite continued inflationary pressures in fuel, energy and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network,” Jassy said in the statement.
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