Markets: Amazon tumbles 8.5% in premarket after posting first loss in 7 years
Amazon dropped more than 8% in premarket trading, after the tech giant slid to its first loss in seven years in the first quarter.
The e-commerce giant was down 8.49% at $2,646.41 in Friday's premarket session, as of 5.05 a.m. ET. If the drop holds when trading opens, Amazon will shed around $130 billion of market value.
Markets: Amazon tumbles 8.5% in premarket after posting first loss in 7 years
Amazon made a loss of $3.84 billion in the first quarter, its earnings revealed after the bell Thursday, down from a profit of $8.11 billion in the same quarter a year earlier.
The bottom line was hit hard by a $7.6 billion reduction in the value of its stake in electric-car maker Rivian, whose shares have crashed almost 70% this year.
Amazon reported its slowest-ever quarterly revenue growth, with a rise of 7.3% year-on-year to $116.44 billion.
The company said its major investments in warehouses and staff during the coronavirus pandemic were catching up with it, as uncertainty grows about consumer spending.
Markets: Amazon tumbles 8.5% in premarket after posting first loss in 7 years
"Today, as we're no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network," CEO Andy Jassy said in a statement released with the earnings results.
Jassy also said there was a high level of uncertainty, with the war in Ukraine, inflation, and supply-chain problems likely to put pressure on the company in the second quarter.
"With inflation hitting household budgets around the world, spontaneous Amazon purchases are likely to be reined in," Sophie Lund-Yates, analyst at Hargreaves Lansdown, said.
One bright spot was Amazon Web Services. Revenue at the cloud-computing segment jumped 36.6% year-on-year to $18.44 billion.
Amazon stock has fallen 13.27% in 2022, as of Thursday's close, during a broad sell-off in US equities.
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