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Topic: Amazon reports its first unprofitable year since 2014 - page 2. (Read 211 times)

legendary
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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
hero member
Activity: 882
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OSHA officials found Amazon warehouse workers at high risk of lower back and other injuries from twisting, bending and lifting that they perform as much as nine times per minute. The company was expected to appeal, and a spokesperson said the allegations didn't "reflect the reality of safety at our sites."
Of course warehouse job is very tough and it will affect your lower back and spine. For the most part, workers have to take heavy items from table to trailer and I believe it's more than 9 parcel per minute. I don't think that working conditions will be better in US than in Germany. You'll never see a German person as a delivery guy in Amazon or as a warehouse worker because these jobs are very tough and Amazon uses the advantage of poor immigrants who have language barrier, don't know their  rights, so on and makes them work more than they should in more tough environment than DHL. So, I would say that Amazon is a shady company but at the same time I can't totally blame them because people want everything to be as cheap as possible, they like the idea of prime delivery, cheap or free delivery, this can't be done without exploiting of workers. It's bad of course but I think that society enjoys it and since if it's cheap, it's okay for people if some workers are oppressed.
hero member
Activity: 1582
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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..

I'm not going to judge the other companies but from what we know amazon is again the company and they're actually the most famous e-shop people from all over the world use their services that's why I was really surprised when I saw this news saying amazing was unprofitable this year and had a hard time because if this happened for a company like this then I think others are having even worst situation which not good and his show us how the demand os buying and selling products decreased in all over the world which indicated the bad economic situation of the world.
legendary
Activity: 3332
Merit: 6809
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Could amazon recover and be a buy?
Sure, they're the biggest (or one of the biggest) retailers out there, and I don't think they're going to be in danger of bankruptcy in our lifetimes, like some others have been (Sears, JC Penny, Circuit City, etc.).  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.

I used to own some shares in Amazon, but I sold them a while back because I had to.  Too bad I wasn't able to hang onto them, because I do think they're going to improve profits--and even if it takes them a while, their stock likely won't fall out of favor.
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legendary
Activity: 2786
Merit: 3845
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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.

It's very unrealistic to expect a company to be making great financial results every quarter forever. Speedbumps are to be expected from time to time, even for massive companies such as Amazon.
legendary
Activity: 3080
Merit: 1500
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..
legendary
Activity: 2562
Merit: 1441
Quote

After a long run of surging profits from pandemic-era shopping sprees, Amazon is feeling the hangover. The retail and tech giant is reporting its first unprofitable year since 2014.

Amazon lost $2.7 billion last year, the company said on Thursday. This was despite holiday-season sales growing 9%. Amazon's shares fell in after hours trading.

By far, the biggest culprit for Amazon's losses over the year was the company's hefty investment in the electric automaker Rivian whose value plummeted last year and ate into Amazon's bottom line.

Amazon had taken a 20% stake in Rivian and has begun rolling out the carmaker's electric delivery vans. Rivian wanted to replicate Tesla's success and held one of the largest initial public offerings in U.S. history. But last year, the exuberance faded, the carmaker made pricing missteps and it fell short of growth targets. Its stock price dropped 82%.

For Amazon, the loss on its investment comes right when it contends with the need to recalibrate after a pandemic-era upsurge.

During the pandemic, the appetite for online shopping seemed to promise exponential growth, and many believed the habit changes could be permanent. Amazon couldn't hire and built warehouses fast enough; its profits doubled and kept growing. But then people returned to physical stores, switched from cocooning to travel and outings, and eventually got more hesitant to spend as inflation rose.

Amazon began reconsidering its warehouse expansion plans. Industry reports tracked cancellations, closures and delays. Andy Jassy, in a rare Amazon CEO appearance on a quarterly call with investors, said his top priority was cutting costs in the company's operations.

"It's important to remember that over the last few years we took a fulfillment-center footprint that we built over 25 years and doubled it in just a couple of years," he said. "We at the same time built out a transportation network, for last mile, roughly the size of UPS. Just to get those functional, it took everything we had."

Last month, Amazon announced it expected to cut 18,000 jobs, or about 5% of the corporate workforce. Jassy, in a blog post, referenced "the uncertain economy" and the company's pandemic-era hiring spree.

At the peak, in late 2021-early 2022, Amazon employed more than 1.6 million part-time and full-time workers globally. Thursday's financial report shows that number is now down to 1.5 million.

In October, the company — the second-largest private employer in the U.S. — raised the average starting pay for U.S. warehouse and delivery workers to $19 an hour from $18 to stay competitive.

Now, Amazon is also seeing growth slow down also in its biggest money-maker, the cloud computing business — as companies scale back in the face of high inflation and interest rates.

When reporters asked about the slowdown at Amazon Web Services Thursday, Chief Financial Officer Brian Olsavsky said: "We realize everyone's trying to cut their budgets – we are in our main Amazon business... We do expect to see some slower growth rates for the next few quarters."

Still, Amazon continues to invest in new ventures. The company is working to close its $4 billion deal to buy One Medical, a chain of primary-care clinics. And it launched a $5 subscription service for generic prescription medication for its paying Prime members, hoping to draw more people into the program.

Separately, the company faces a protracted fight against an upstart unionization push. Amazon last month lost its bid to overturn the first-ever union win at a Staten Island warehouse. Federal labor officials ordered the company to begin bargaining with the Amazon Labor Union. But the matter is likely to reach courts.

In recent weeks, Amazon received a series of citations for safety violations from federal inspectors at the Occupational Safety and Health Administration. This is for six warehouses in Colorado, Florida, Idaho, Illinois and New York.

OSHA officials found Amazon warehouse workers at high risk of lower back and other injuries from twisting, bending and lifting that they perform as much as nine times per minute. The company was expected to appeal, and a spokesperson said the allegations didn't "reflect the reality of safety at our sites."

https://www.npr.org/2023/02/02/1153562994/amazon-reports-its-first-unprofitable-year-since-2014


....


  • 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.
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