Amazon shares slump following Q1 earnings miss

Shares in Amazon slid in pre-market trading after the eCommerce giant posted earnings that failed to meet expectations and issued revenue forecasts that failed to meet analysts' estimates.

Amazon said on Thursday that first-quarter adjusted earnings per share of $7.38 each, short of the $8.36 expected on the Street, driven by a $7.6bn loss on its Rivian investment after shares in the electric vehicle maker shed more than half their value during the period.

As a result of the Rivian hit, Amazon delivered a net loss of $3.8bn, or $7.56 per diluted share, compared with a net income of $8.1bn or $15.79 per share in the first quarter of 2021.

Revenues increased 7% to $116.44bn, slightly ahead of estimates of $116.3bn but still significantly shy of the 44% expansion delivered at the same time in 2021 to mark the slowest rate for any quarter since the dot-com bust in 2001. Operating income decreased to $3.7bn from $8.9bn.

Amazon's second-quarter forecasts also indicated that growth could slow even further going forward, down to between 3% and 7% year-on-year, projecting revenues for the current quarter of $116.0bn-121.0bn, missing the $125.5bn average analyst estimate.

"The pandemic and subsequent war in Ukraine have brought unusual growth and challenges," said chief executive Andy Jassy.

"Today, as we're no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network. We know how to do this and have done it before. This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020."

As of 1010 BST, Amazon shares were down 8.82% in pre-market trading at $2,637.00 each.