Amazon reports its first unprofitable year since 2014

Lucius

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Quote from: justdimin on March 22, 2023, 04:14:02 AM

~snip~
Not like that would happen but if that happened they would cut costs and still go on, fire tens of thousands of people and still move on. All in all amazon is a huge company and they are doing fine and there is absolutely no reason to be sad about their loss, I rather cry about the worker they have who lives under poverty level wage.

Even if they fall into some serious problems, it is unlikely that politics will let them fail just like that, because it is still a company of great importance for the US considering that it is globally positioned. What you say about the workers is unfortunately true, because there are so many stories about it online that one wonders if it is possible for such a company to actually profit from such massive exploitation of people all over the world. But they are not the only company that operates in such a way that people are consumables that they use in the way that suits them best.

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Quote from: davis196 on February 14, 2023, 06:52:23 AM

1.Investing in an EV manufacturer is a risky move that would probably pay off in the long term(after 10+ years).
2.Amazon had a growing business during the pandemic. The pandemic is now over, it's pretty normal for online sales to drop.
3.I don't think that AWS is the biggest part of Amazon. This isn't a "make or break" situation. I'm sure that Amazon Web Services will be fine
I don't feel sorry for Amazon. We should feel sorry for all the small businesses, that were killed by Amazon. Grin

This is 100% true and a fact. Just because they spent more money doesn't mean that they are dying, they still had insane amount of profit but they just ended up spending a lot and that is why it looks like a loss. Hell these companies have cash reserves as big as their entire operational costs, which means that for the year of 2023 they could make ZERO revenue and still run for a while, probably at least a year.

Not like that would happen but if that happened they would cut costs and still go on, fire tens of thousands of people and still move on. All in all amazon is a huge company and they are doing fine and there is absolutely no reason to be sad about their loss, I rather cry about the worker they have who lives under poverty level wage.

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Quote from: avikz on February 06, 2023, 12:33:31 PM

It's unfortunate that a giant like Amazon had to face financial losses. So it's probably the best time to buy Amazon stocks. It's already down by 35% in the last one year and trading at a very attractive level. If someone wants to play long term, probably this is the time to buy.

Amazon's business is robust but due to the ongoing recession, they are seeing less demand for their cloud services. Also there are multiple competitors available in the market which wasn't the case couple of years back.

My personal feelings is Amazon will come back for sure, but just needs to have patience. Corporates make wrong investment decisions too just like any retail investors..

Its nothing new. Large corporations like this make losses all the time. I think that's a difference between them and a small business. If a small business makes that kind of loss they will be in big trouble but since its Amazon, its seen as a huddle that can be dealt with.
Buying the stock when they're down seems like a good investment because the stocks of a company like Amazon will most likely go up but like you said, it has to be the long run strategy because I don't think it will be going up at a fast rate, I may be wrong.

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Yeah I heard the rivian too i think its very hard to compete with tesla and the stock of rivian still at minus. In the other hand I don't know if the web service is slightly down in the ERA of internet and AI like this.

xSkylarx

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I've never heard that they are into making electric cars, which I've searched for, and I saw that they really have their own design. I think their losses are combined with the inflation that is happening right now as the products are getting expensive and people don't have extra income to purchase products on Amazon, and they also invested in the rivian project that they are doing, which is why they are still at a loss, but once their rivian is successful, I think they will be up again. Though that is really the life of business, you are not always at the top, so there are really times that you are at the bottom.

davis196

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Quote

Lost $$ on rivian EV investment
Doubled fulfillment center overhead on their warehouse expansion over roughly the past 2 years
Demand for amazon web services declined
Amazon is buying one medical for $4 billion

1.Investing in an EV manufacturer is a risky move that would probably pay off in the long term(after 10+ years).
2.Amazon had a growing business during the pandemic. The pandemic is now over, it's pretty normal for online sales to drop.
3.I don't think that AWS is the biggest part of Amazon. This isn't a "make or break" situation. I'm sure that Amazon Web Services will be fine
I don't feel sorry for Amazon. We should feel sorry for all the small businesses, that were killed by Amazon. Grin

Smack That Ace

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If the world economy did not fall into crisis, their loss would be seen as a sign of insecurity for them and their investors. But 2022 is a terrible year for the world economy due to post covid and war, so the business loss is predictable. As mentioned in the article, the loss was largely due to its investment in electric car company Rivian Automotive Inc, not its declining business. So I see nothing to worry about, recovery is just a matter of time.

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Quote from: DaveF on February 07, 2023, 12:43:28 PM

And....it's also a bit of a paper loss.
~~~

Oh.. OK.. so that is the case here.

Amazon has an absolute monopoly in terms of e-commerce, and therefore they are not going to care even if the profits go down for a year or two. I am 100% sure that the so called loss is a tactic from them to lower the tax bill. It is their competitors who are going through losses now, as a result of monopolistic policies from Amazon. The misuse of monopoly by Amazon has made the lives of their competitors miserable and many of them had to shut down. Fortunately here in India, we have a strong competitor (Flipkart) who just refuses to lose to Amazon.

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I really dislike this shit "news" writter by the press and sometimes written also by economists.

They always think you have to be profitable year by year and always in an up arrow. Man you know that its imposible like in life you have upside downs.

So if you invest a ton of money in X project and you know that project can make money after 3 years, obviusly your balance sheet can be not so profitable in that 3 years, and after that when the business its marching on wheels BUM mega profit.

And the same idiot who say the mention below, its gonna say something like "the smart mind behind the market strategy of Amazon".
With some highlighted titles like "trust the process" Amazon was spending so much money on this for 3 year until now..... bla bla bla.

And all the idiots making paic sell and panic buy, and after go and read some Warren Buffet thing to no make any similar to Warren Buffet.

"Buy the rumor, sell the news" in one of his aceptions.

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Quote from: Hydrogen on February 06, 2023, 08:47:36 AM

-cut-
Could amazon recover and be a buy?
-cut-

I don't know if there's a serious competition for amazon in anywhere. Alibaba might be one in the future but i doubt it. People have issues with chinese products.
So if it gets to grow unchallenged, it can totally destroy anyone who is trying to get into that market.

Unless there's a totally new kind of disruptor coming along, or amazon gets sued to the ground, staff goes to total strike and that's backed by everyone or something like that.
I can't see that amazon would crash. I am not sure how big it can grow but ahead of Apple marketcap for sure.

Flexystar

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Why not, they are expanding the physical warehouses everywhere in the need of increasing the prime services and also cut down the delivery times as if you can press order and the delivery guy would be standing next to you. They are slowly forgetting that they are e-commerce businesses and not something retail OTC with store nearby every customer they are fulfilling the needs. Due to this they are heavily investing the money. Once the contracts are made they can not be altered with the physical locations until it ends or they are penalized for the same. This is why they are now destroying the jobs of corporates and showing the loses in turn to it. It's entirely wrong and they should not be changing their actual business nature to stay in the competition.

DaveF

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And....it's also a bit of a paper loss.
Some things could have been amortized over a long period, but they took the hit here and now.
Sometimes it works sometimes it does not. A lot of the warehouse build costs were fully written down in 2022 along with some other things.

The cloud expansion has slowed down a bit too, and those data centers are not cheap. But the costs 'incurred' in 2022 were for a large chunk of some builds that they could have written off over years.

Dave's prediction. 2023 will be a meh year again for them as they write off more stuff and then an explosion of profit after that as they don't have the paper losses anymore.

Not to say 2022 was NOT a bad year for them, they defiantly did not do well but they made it look worse on paper then they had to.

-Dave

Smartprofit

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Amazon's losses, in my opinion, are quite predictable ... This state of affairs could have been predicted in advance.

It is very dangerous for a big company like Amazon to show such dynamic growth as it did during the era of the Covid-19 coronavirus pandemic. This destabilizes all business processes of the company.

Amazon now has an excess number of employees (including senior and middle managers). In such a situation, the owners of the company become hostages to the ambitions of the top management of the company.

The leaders of the company, wanting to prove themselves from the best side, initiate new projects, promising fabulous profits to the owners.

However, such adventures only lead to huge losses.

Gyfts

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There's two American car companies that haven't gone bankrupt. Ford and Tesla. Ironically enough Ford is an investor in Rivian. It shouldn't come as a surprise that Rivian is hemorrhaging money and Amazon having sunk its investment. I wouldn't expect every Amazon investment to be a hit. EV's seem like a volatile investment but of course Amazon was thinking they could incorporate Rivian vehicles into their delivery vehicle fleet.

Quote from: Husires on February 06, 2023, 04:47:05 PM

Why did Amazon want to diversify its investments in this way? I understand that Jeff Bezos would do this, but for the company to do it directly, it seems strange, and yet blaming Rivian is not a good thing.
The past year was disastrous for everyone, and I believe that the luxury of buying online has not become what it was in previous years, so it is natural for profits to decline.

If the downward curve continues, then Amazon's golden age is over.

Amazon is diversifying into businesses that can accentuate their primary e-commerce platform. Rivian uses EVs, and of course Amazon is a massive shipping company that relies on gas powered vehicles Amazon has already stated they plan to switch their delivery vehicles to EV's. The pharmacy company they invested in is going to be incorporated and marketed to Amazon prime users.

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Quote from: adaseb on February 07, 2023, 12:33:13 AM

Well most people I know they basically went back to offline ordering. Many just go to a store now instead of ordering online. The Amazon driver when I asked how busy they were, they said it’s much slower now compared to last year.

However it’s still the largest marketplace. They just had a big boost due to Covid and had to hire many people and had to purchase large warehouses. Now that Covid is over they need to scale back. Plus with the recession looming many are saving money instead of buying items they might not need.

After the CoVD-19 outbreak subsides, shoppers will likely return to stores. Amazon drivers should state they're busier than a year ago. Despite returning to brick-and-mortar locations, Amazon is the biggest online retailer. They hired many workers and built huge constructions throughout the pandemic. After the pandemic, their business may need to shift. People are spending less and buying what they need because they expect a recession. It's remarkable how outside pressures effect business and purchase patterns. Since the pandemic and crisis, have your consumers changed their buying habits?

adaseb

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Well most people I know they basically went back to offline ordering. Many just go to a store now instead of ordering online. The Amazon driver when I asked how busy they were, they said it’s much slower now compared to last year.

However it’s still the largest marketplace. They just had a big boost due to Covid and had to hire many people and had to purchase large warehouses. Now that Covid is over they need to scale back. Plus with the recession looming many are saving money instead of buying items they might not need.

Fortify

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Quote from: Hydrogen on February 06, 2023, 08:47:36 AM

Lost $$ on rivian EV investment
Doubled fulfillment center overhead on their warehouse expansion over roughly the past 2 years
Demand for amazon web services declined
Amazon is buying one medical for $4 billion

I had no idea amazon owned a large percentage of rivian. For those who have never heard of rivian EV trucks, they could be head and shoulders above the tesla cybertruck in terms of features and design. There have many amazing features and have to be hands down the best EV truck on the market. The main issue they face is being built as luxury vehicles priced below their material value and cost of construction.

Could amazon recover and be a buy?

I'm not certain their growth potential under current circumstances could translate to a worthwhile number of percentage points.

Rivian was a one off cost that has now been written off, sometimes these new projects can fail but at least they tried. They definitely did over expand during Covid but as long as they are sensible with trimming operations back, there is a lot of slack and savings to be made in future if they continue their cost cutting plans. It seems like a step into the medical sector might potentially be a very lucrative and perfect fit considering their extensive logistics chain that can move these high value items to customers. While I am not a fan of Amazon as an end customer, after seeing them crush many smaller competitors due to predatory pricing, I cannot help but think the Amazon share price is looking cheap right now.

Husires

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Why did Amazon want to diversify its investments in this way? I understand that Jeff Bezos would do this, but for the company to do it directly, it seems strange, and yet blaming Rivian is not a good thing.
The past year was disastrous for everyone, and I believe that the luxury of buying online has not become what it was in previous years, so it is natural for profits to decline.

If the downward curve continues, then Amazon's golden age is over.

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Quote from: arallmuus on February 06, 2023, 03:54:35 PM

Quote from: The Sceptical Chymist on February 06, 2023, 01:41:29 PM

They've also spent most of the time since their inception being unprofitable if I'm not mistaken, and yet the stock has always been a Wall Street darling.

Pretty good statement there and yeah this is a fact, Most of these top companies never really brag about their company when they are making tons of money out of our pockets annually but it seems like always a huge issue when they are not while in fact, one or two bad year wont really harm their business as they have been making tons of money so far

They incurred losses which is something that needs to be addressed if you’re a business man, probably either the economy is not that good or your business is slowly losing the competition. Well, they are still a big company and I believe they can still have the potential to rise, its just that maybe they are not used to a losses anymore. This can be a result of so many factors, investing into something might not that be effective for them.

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Rivian trucks were great when launched, but as soon as it hit the markst a lot of users complained on a lot of things, most especially build quality. Some trucks were recalled, and perhaps that hurt the marketing of Rivian very hard because on the surface, it looks and feels better than Teslas, but the reviews and reactions from actual buyers say otherwise. Also, I never thought AWS usage declined over the years. Here I thought many bsuinesses and organizations will utilize it, but boy I was wrong. Amazon as a company, is profitable because of its stocks, but needless to say there are tons of their subsidiaries and investments that aren't really cut out to absorb the blows of their competitors.

Topic: Amazon reports its first unprofitable year since 2014 (Read 261 times)