Despite a tough economic environment, Amazon’s revenue rose 7% in the second quarter.
Amazon posted revenue of more than $121 billion in the second quarter, up 7%, despite an unfavorable year-over-year comparison and a difficult economic environment. The e-commerce giant’s stock rose 10% in e-commerce after the close, following many disappointing performances from other tech companies. The US group, on the other hand, posted a net loss of $2 billion due to a $3.9 billion investment loss at electric car maker Rivian.
“Despite inflation driving up fuel, energy and transport prices, we are making progress towards more controllable costs (…), particularly by improving the productivity of our network of sorting centers and logistics,” Amazon boss Andy Jassy said in a press release. Amazon hasn’t disappointed on the cloud side either: its AWS service, the world leader in this market, generated sales of 19.55 billion, a result that exceeded analysts’ expectations. But for the current quarter, Amazon expects operating profit — a key indicator of profitability — to be between $0 billion and $3.5 billion, up from $4.9 billion in the same period last year.
Seattle society is suffering “Reduced consumer spending and rising costs”, explains Andrew Lipsman, analyst at Insider Intelligence. In just a few months, the economic environment for the tech giants has radically deteriorated. The health crisis and restrictions have led to an explosion in online habits, from consumption to work and entertainment. Digital transformation continues – most platforms are gaining new users – but at a slower pace, comparable to that before the Covid-19 pandemic. Added to this are numerous macroeconomic constraints, starting with inflation and difficulties in the supply chain.
The second largest employer in the US behind Walmart had 1.6 million employees at the end of 2021, more than twice as many as in 2019. But since the spring Amazon has had a turn “Moved from an understaffed situation to an overstaffed situation”, noted Brian Olsavsky, the group’s chief financial officer. Therefore, after difficulties in recruiting, the platform decided to slow down the pace of recruitment, like Google, Microsoft and Snap.