Technology

Amazon assures that earnings exceed expectations

Amazon’s Q2 revenue was over $121 billion, up 7%. (Photo: 123RF)

San Francisco. Amazon’s second-quarter revenue was over $121 billion, up 7%, despite an unfavorable year-to-date comparison and difficult economic conditions.

Shares of the e-commerce giant jumped more than 10% in e-trading after the close of trading following many disappointing results from other tech companies.

However, the US group recorded a $2 billion net loss due to a $3.9 billion loss on a $3.9 billion investment in electric vehicle maker Rivian.

“While inflation drives up the price of fuel, energy and transportation, we are making progress towards more manageable spending. […]in particular by improving the performance of our network of sorting and logistics centers,” said Andy Jassi, Amazon boss, quoted in a press release.

Amazon did not disappoint in the cloud either: its AWS service, the world leader in this market, earned $ 19.55 billion in revenue, which exceeded analysts’ expectations.

But for the current quarter, Amazon expects operating income — a key indicator of profitability — to be between $0 billion and $3.5 billion, up from $4.9 billion last year over the same period.

The Seattle-based company is suffering from “declining consumer spending and rising costs,” said Andrew Lipsman, an analyst at Insider Intelligence.

In just a few months, the economic environment for the tech giants has drastically deteriorated.

The health crisis and self-isolation have led to an explosion in online habits, from consumption to work and play. The digital transition continues, with most platforms gaining new users, but at a slower pace than before the COVID-19 pandemic.

Added to this are numerous macroeconomic constraints, starting with inflation and supply chain difficulties.

The second-largest U.S. employer after Walmart had 1.6 million employees at the end of 2021, more than double its 2019 figure.

But since the spring, Amazon has “went from understaffed to bloated,” said Brian Olsawski, the group’s chief financial officer.

After struggling with hiring, the platform decided to slow down the pace of hiring, like Google, Microsoft and Snap.

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