Rising prices and fears of a recession have not yet harmed the world’s largest online retailer. Amazon grows sales and lets operating profit down far less than expected. That’s good for the stock market.
Amazon significantly increased its sales in the second quarter despite high inflation and fears of a recession. Revenues increased year-on-year by 7 percent to $121.2 billion (119 billion euros), as the group announced after the US stock market closed. Although operating profit fell from $7.7 billion to $3.3 billion, it exceeded experts’ expectations. Amazon shares initially rose 13 percent in after-hours trading.
Bottom line, Amazon posted a net loss of $2.0 billion. The reason, however, was that a stake in the electric car manufacturer Rivian was devalued by $3.9 billion. Excluding special items, earnings per share were $0.18, beating guidance of $0.13. In the important cloud business (AWS), sales in the second quarter were 19.7 billion dollars after 14.8 billion in the same period last year.
CEO Andy Jassy said progress had been made on certain costs, despite rising fuel, energy and transport costs. In particular, productivity in the warehouse and delivery network has been improved. Nevertheless, operating expenses increased by around 12 percent to $ 117.9 billion compared to the previous year.
CFO Brian Olsavsky spoke of a very strong business in June. The costs remained in line with expectations. For the current quarter, Amazon expects revenues of between $125 billion and $130 billion, driven by higher prices for its Prime membership program. Experts expect 126.4 billion here.
In fact, the entire retail industry in the US is facing the consequences of high inflation. Rival Walmart issued a profit warning a few days ago. Consumer prices in the US have recently risen by 9.1 percent – the highest level since the end of 1981. The strong inflation is eating away at the purchasing power of the citizens, as wage increases are not keeping pace with inflation.
