Amazon (NASDAQ:AMZN) shares rose in after-hours trade on Thursday, despite the company reporting a net loss and issuing a modest forecast for the third quarter. In extended trading, shares soared more than 10% as a focus on AWS acceleration and robust top-line growth eclipsed a turbulent bottom line. Overall net sales grew 7% to $121.2 billion, handily above the $2.04 billion market expectation. In the second quarter of 2022, cloud business net sales increased from $14.8 billion in the second quarter of 2021 to $19.74 billion. This rate represented a 33% increase over the same quarter last year. In the meantime, the bottom line was impacted by significant factors that contributed to a $2 billion net loss, or a $0.20 per share loss. Analysts had projected positive earnings per share figure of $0.12, although this comparison may not be appropriate. Specifically, the loss was attributable to a $3.9 billion charge relating to Amazon’s (NASDAQ:AMZN) shareholding in Rivian Automotive (RIVN). In addition, operating cash flow decreased significantly, falling by 40% to $35.6B compared to the prior year.
Having experienced back-to-back multibillion-dollar losses on Rivian in the preceding two quarters, the market tends to assume that the associated costs have been substantially eliminated at this time. Additionally, according to CEO Andy Jassy, the corporation effectively manages inflationary effects. Despite ongoing inflationary pressures in fuel, electricity, and transportation costs, we are making headway on the more controllable costs we mentioned last quarter, said Amazon (NASDAQ:AMZN) CEO Andy Jassy. As we continue to make Prime better for members by investing in faster shipping speeds and adding unique benefits such as free delivery from Grubhub for a year, exclusive access to NFL Thursday Night Football games beginning September 15, and the September release of the highly anticipated series The Lord of the Rings: The Fellowship of the Rings: The Two Towers, revenue is also increasing. Advertising, a big aspect of Amazon’s business, also posted significant improvements. The segment’s revenue increased 18% from the prior year to $8.76B.
In contrast to its most recent report, Meta Platforms (META) may be gaining market share from its mega-cap technology competitors. Moving forward, the business anticipates third-quarter net sales between $125B and $130B, compared to the consensus estimate of $126.58B. Foreign exchange rate fluctuations are predicted to affect the third quarter by 390 basis points. Meanwhile, operating income is anticipated to range from $0 to $3.5 billion, compared to $4.9 billion in the third quarter of 2021.
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