Amazon Q1 Takeaways: Mixed Earnings, Lower Guidance Sends Stock Falling

Amazon.com Inc AMZN reported first-quarter financial results after market close Thursday. Here are the key highlights for investors.

What Happened: Amazon reported first-quarter revenue of $116.4 billion, up 7% year-over-year and ahead of a consensus estimate of $116.3 billion, according to Benzinga Pro.

The company reported a net loss of $7.56 per share versus earnings of $15.79 per share in the year-ago period. The net loss in the first quarter includes a valuation loss of $7.6 billion related to Amazon’s investment in Rivian Automotive RIVN. Ford Motor Co F reported a similar value change Wednesday.

“The pandemic and subsequent war in Ukraine have brough unusual growth and challenges,” Amazon CEO Andy Jassy said.

Amazon’s AWS cloud business grew 37% year-over-year in the quarter and has increased 34% annually over the last two years.

AWS wins and expanded deals in the first quarter included Verizon Inc VZ, Telefonica TEF, Boeing BA, the National Hockey League and the Bundesliga German soccer league.

See Also: How Amazon Stock Looks Heading Into Q1 Earnings Print

In the first quarter, Amazon completed its acquisition of MGM bringing over 4,000 films and 17,000 television episodes into the Amazon Prime Video library.

Amazon said the trailer for the upcoming Amazon Prime Video show “The Lord of the Rings: The Rings of Power” broke a global record with 257 million views in its first 24 hours. The show will debut on Sept. 2, 2022.

Amazon strengthened its sports lineup with the announcement of Al Michaels and Kirk Herbstreit joining the “Thursday Night Football Team.” Amazon kicks off an 11-year agreement with the NFL in September for Thursday night game coverage.

“Lost Ark,” a free-to-play online game, passed the 20 million user mark and is the second most played game of all time on Steam based on concurrent users. The game was published by Amazon Games in several countries.

Security devices unit Ring launched in Japan in the first quarter bringing items like cameras and video doorbells to customers.

What’s Next: Amazon is guiding for second-quarter sales to come in a range of $116.0 billion to $121 billion, representing year-over-year growth of 3% to 7% respectively. The guidance comes in shy of an estimate of $125.55 billion, according to Benzinga Pro.

“We know how to do this and have done it before. This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions,” Jassy said.

Amazon will host its annual Prime Day in July across over 20 countries.

AMZN Price Action: Amazon shares are down 9% to $2,627.98 in after-hours trading.