Amazon Posts First Quarterly Loss Since 2015 as Costs, Rivian Stake Weigh on Results

The company’s results were affected by its stake in electric vehicle maker

Rivian

Automotive Inc., which has seen its stock plunge by more than 65% this year. Amazon has a roughly 18% stake in the company and had a pretax loss of $7.6 billion due to its holdings in the company.

Amazon signaled more uncertainty and slowdown ahead. It said it expects its operating income for the current quarter to be between a loss of $1 billion and profit of $3 billion. It posted $7.7 billion in operating income during the second quarter of 2021. The company’s shares were down roughly 10% in after-hours trading.

“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Chief Executive Andy Jassy said in a statement. Mr. Jassy said Amazon would improve by working through pressures from inflation and its supply chain.

After a period of tremendous growth as the company sought to respond to new consumer needs during the pandemic, Amazon has seen its momentum stall recently as it seeks to deal with inflation, a national labor shortage and supply-chain disruptions.

Amazon’s operating expenses in North America have been growing at a faster rate than its sales. The company had to spend billions to keep its facilities humming during the ups and downs of the health crisis. Meanwhile, the total value of goods sold on Amazon’s site in 2021 grew at half the rate it did in 2020, according to an analysis by research firm Marketplace Pulse. Amazon on Thursday reported a 3% year-over-year drop in its online stores segment, which include product sales and digital media content.

The trend isn’t unique to Amazon. The share of U.S. retail sales that happen online rose markedly during the pandemic, reaching 15.7% in the second quarter of 2020. It fell to 12.9% during the last three months of 2021, according to Census Bureau data adjusted for seasonal factors.

March marked the first month since the pandemic started that e-commerce sales declined from the same period a year earlier while in-store sales rose, according to Mastercard SpendingPulse, which tracks transactions made over the Mastercard payments network as well as survey-based estimates for cash and checks.

Investors have kept their eyes more focused on Amazon’s other large businesses as its core e-commerce unit has seen sales slow. Amazon Web Services, the leading cloud-computing service for businesses around the world, has continued to expand at a blistering pace. The unit has continued to stand out as a profit machine even as competition from

Microsoft Corp.

, Google and others has intensified. Sales at AWS were up about 37% in the first quarter at $18.4 billion.

Earlier this year, the company for the first time broke out results from its advertising unit, showing investors a surging business that has emerged as a rival to advertising powerhouses such as

Meta Platforms Inc.

and

Alphabet Inc.’s

Google.

Amazon reported $7.87 billion in ad sales for its first quarter, up 23% year-over-year. In addition, investors have been impressed with the company’s developing media businesses, including the recent completion of its $6.5 billion purchase of the MGM movie and television studio.

Amazon said it expects its Prime Day shopping event to happen in July. The event typically gives Amazon a revenue boost.

The company may see additional cost pressures as it navigates continued attempts by warehouse employees to unionize. In New York, workers at its largest warehouse in Staten Island voted earlier this month to establish the company’s first union in the U.S.

While Amazon has appealed the results and alleged inappropriate behavior by the federal agency that oversaw the vote, labor experts have said widespread unionization could force the company to change benefits and policies, which may multiply costs. Workers at a second Staten Island facility are voting on unionization this week, and activists are targeting other warehouses throughout the country.

The National Labor Relations Board will count ballots from the second Staten Island facility on Monday. Activists have said they view the vote as critical in their push to broaden their efforts.

Write to Sebastian Herrera at [email protected]