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Amazon shares soar after strong top-line results in Q2

Share gains come despite another net loss, sharp drop in operating income

Amazon shares soar on strong Q2 sales growth (Photo: Amazon) Inc. shares soared in after-hours trading on Thursday as investors focused on a solid second-quarter revenue performance and positive third-quarter guidance, and not on a second-quarter net loss and a decline in operating income.

Net sales increased 7% year over year to $121.2 billion in the second quarter, compared with $113.1 billion in second-quarter 2021, Amazon said. Sales increased 10% after backing out a $3.6 billion hit from year-over-year changes in foreign exchange rates, Amazon said.

Third-quarter sales are expected to increase between 13% and 17% from the 2021 period to between $125 billion and $130 billion, Amazon (NASDAQ: AMZN) said. The guidance anticipates a nearly 4-percentage-point hit from unfavorable exchange rates, Amazon said

As of nearly 7 p.m. ET, Amazon shares had risen $17 a share, a gain of nearly 14% from Thursday’s closing price.

Amazon reported a $2 billion net loss in the second quarter, its second consecutive quarterly loss. The loss included a $3.9 billion pretax valuation loss in Amazon’s investment in electric vehicle maker Rivian Automotive Inc. (NASDAQ: RIVN), which plans to provide Amazon with 100,000 battery-powered delivery vans by 2030. 

The decline in the value of Amazon’s Rivian investment was recorded as a nonoperating expense, Amazon said. Rivian shares went public in early November at $78 a share and traded as high as around $170 but today trade at $34 a share.

Amazon began rolling out Rivian delivery vehicles earlier this month and plans to have thousands of vehicles in more than 100 cities by the end of 2022.

Amazon’s second-quarter operating income fell to $3.3 billion from $7.7 billion in the second quarter of 2021. The company expects third-quarter operating income to max out at $3.5 billion, providing it generates a $1.5 billion cost improvement in its fulfillment operations. Amazon has scaled back its fulfillment network expansion as e-commerce activity levels off following breakneck demand in 2020 and 2021.

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.