“While sales were short of expectations by a mere $6 million, the bigger headline was the company’s first quarterly loss since 2015, at a loss per share of $7.56, or nearly $16.00 shy of the Street’s earnings per share expectations,” said William Blair analysts, who have an outperform rating on Amazon shares, in a note to clients on Thursday. “Under the hood, the company reported an $8 billion pretax loss related to its investment in Rivian Automotive. Recall the company reported a $12 billion benefit in the prior quarter related to the investment. We estimate the company’s earnings per share excluding the investment-related loss would be roughly $3.40, still, 60% below consensus as the company continues to face headwinds related to shipping, labor, excess capacity, and tough prior-year comparisons.”
Analysts like Truist Securities’ Youssef Squali remain bullish that Amazon will perform in the second half of 2022.
“We should start seeing material improvement to labor and fixed cost efficiency in 2H22, starting with Prime Day in July and then in the seasonally strong 4Q22,” said Squali, who recommends buying Amazon shares.
