AWS can’t help Amazon avoid first loss since 2015





Amazon’s fast-growing cloud division couldn’t help its parent company avoid posting its first quarterly loss since 2015.

Amazon Web Services saw revenue grow by 37% to $18.4 billion for the first quarter of 2022. That amounted to an operating profit of $6.5 billion, which was up 57% year-on-year and outpaced analyst expectations by almost $1 billion.

Both of its main cloud rivals, Microsoft Azure and Google Cloud, posted strong growth to start the year, as the market for cloud computing shows no signs of slowing down, despite the sort of difficult macroeconomic conditions which are impacting their parent companies.

Despite net sales of $116.4 billion for the quarter, Amazon at large fared less well to start the financial year. Amazon posted a $3.8 billion loss for the quarter, as falling post-pandemic demand, supply chain issues, the ongoing war in Ukraine and losses from its investment in the electric carmaker Rivian all dented earnings.

“We’re not immune to inflationary pressures on the cost side and with the ongoing supply chain disruptions and the start of the war in the Ukraine since our last quarter,” director of analyst relations at Amazon, Dave Fildes, told analysts after the earnings were announced. “We see larger impacts of inflation, some line haul, shipping rates, fuel shipping supplies and wages, which we talked about in some recent quarters as well. And we also see some volatility in utility pricing for some of the energy costs in operating the AWS data centers.”

Copyright © 2022 IDG Communications, Inc.




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