In the first quarter of 2022, Amazon reported total revenue of $116.444 billion, an increase of more than 7% over the same period in 2021. Also, another $3.844 billion in losses compared to net profits of $8.107 billion in 2021.
According to TradingPlatforms.com, net sales totaled $69.244 billion in North America, about 8% over $64.366 billion a year ago. However, compared to a year earlier, international net sales fell by 6% to $28.759 billion from $30.649 billion.
A valuation loss of $7.6 billion in non-operating expenses from Amazon’s common stock investment in Rivian Automotive Inc. is part of the Q1 2022 net loss.
Tradingplatform.com’s Edith Reads believes that Amazon’s plans to adopt “Just Walk Out” technology will move it to greater heights and cut its operating costs. She says, “The technology allows customers to check out at a fast rate by scanning QR codes, their palm, or inserting their debit or credit cards for payments from Amazon Go stores to Amazon Fresh stores. She added, “With Just Walk Out” in Amazon’s physical stores, customers could have more flexibility and convenience, and the firm will realize higher revenue.”
Amazon’s operating costs continue to rise
Total operating costs rose by over 13 percent to $112.775 billion in the first quarter. That is an increase from the previous year’s $99.653. Fulfillment costs totaled $20.271 billion in Q1 2022, up nearly 23% from $16.530 billion a year earlier.
Amazon’s chief financial officer, Brian Olsavsky, attributed this to Amazon’s rapid hiring and warehouse expansion during the pandemic. According to him, Amazon was taking steps to adjust its operations.
During the first quarter of 2021, operating income was $8.865 billion, a decrease of 58.4 percent. If not for the success of Amazon Web Services (AWS), the company’s operating results would have been negative.
Compared to 2021, AWS’ revenue increased by 37 percent to $18.441billion, from $13.503. In addition, Q1 2021’s operating income was $6.518 billion, an increase of 57% from the previous quarter’s operating income of $4.163 billion.
Inflation has not affected consumer demand, but Amazon keeps a close eye on it to see if it affects consumer spending.
Olavsky claimed that the annual compound growth rate had been 25 percent before and after the pandemic. Olsavsky also confirmed that Amazon’s annual Prime Day sales event would be in July.