Amazon forecast a bleak outlook for the second quarter after the delivery giant faced several challenges that led to higher costs.
Amazon forecast second-quarter net sales between $116 billion and $121 billion, below analysts’ estimate of $125.5 billion.
Despite the price hike for its fast-shipping club Prime, Amazon expects to lose up to $1 billion in operating income or earn as much as $3 billion in the current quarter.
For the first quarter, the company reported a loss of $3.8 billion, or $7.56 per share, compared with a profit of $8.1 billion, or $15.79 per share, a year earlier.
Despite the gloomy sales outlook, Amazon is benefiting from its Amazon Web Services. AWS sales rose 37% to $18.4 billion, slightly above analysts’ estimates.
Amazon chief executive Andy Jazzy said the company was working to meet its challenges, including meeting staffing needs and capacity in the warehouse, but he pointed out that the company still had work to do to improve productivity.
“This may take some time, particularly as we work through ongoing inflationary and supply chain pressures. We see encouraging progress on several customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020,” Jazzy said.
The sources for this piece include an article in Reuters.