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Amazon posts big net loss, drop in operating income

Amazon.com Inc. shares took an after-hours beating Thursday after the e-tailing giant posted a $3.8 billion first-quarter net loss, equal to $7.56 per diluted share, compared with an $8.1 billion profit in the 2021 quarter.

The bottom-line number was noisy, as it included a $7.6 billion pretax loss in the value of Amazon’s (NASDAQ: AMZN) stake in electric truck manufacturer Rivian Automotive Inc. (NASDAQ: RIVN). Rivian shares have plummeted since it went public last November, falling to the low-$30s range from a post-IPO high of about $170 a share.

As of 7 p.m. ET, shares were down 9.14%, which was well off its worst levels of the after-hours session. Shares had sunk nearly 13% earlier in the session before recovering.

Amazon’s top-line results were actually solid, though the growth was not evenly distributed across all product lines. Net sales increased 7% to $116.4 billion, coming in near the high end of Amazon’s estimates. Excluding a $1.8 billion currency headwind, net sales rose 9%. But surging transportation and labor costs took their toll. Operating income dropped to $3.7 billion in the first quarter, compared with $8.9 billion in the first quarter of 2021. Amazon’s shipping costs rose 14% year-over-year to nearly $19.6 billion as the company coped with soaring container shipping and fuel costs.

Amazon has doubled the size of its fulfillment network over the past two years to keep pace with unprecedented pandemic-related demand. The company said it has caught up with capacity shortages and can now focus on productivity and efficiency improvements. The reliability of Amazon’s one-day shipping offering, launched with great fanfare before the pandemic only to be overwhelmed by an avalanche of demand, is back to levels seen shortly before the pandemic, CFO Brian Osalvsky said.