Amazon’s slow growth forecast causes stock to drop

E-commerce giant Amazon recently reported fourth-quarter sales beating analysts’ estimates, but reported its first unprofitable year since 2014 due largely to its fizzling investment in electric truck builder Rivian. The company’s sluggish first-quarter guidance has caused its stock to drop more than four percent in morning trading.

CNBC reports that e-commerce giant Amazon recently reported higher-than-expected revenue for the fourth quarter, but the stock fell after the company provided first-quarter guidance that fell short of analysts’ expectations.

The 750,000-square foot Amazon fulfillment centre was opened by workers on August 1, 2017. It is located in Romeoville. Photo by Scott Olson/Getty Images

An employee places packed goods tons container at the distribution center of US online retail giant Amazon in Moenchengladbach, on December 17, 2019. (Photo by INA FASSBENDER / AFP) (Photo by INA FASSBENDER/AFP via Getty Images)

 (INA FASSBENDER/AFP via Getty Images)

The e-commerce giant has seen its lowest year of growth in 25 years. Blaming inflationary pressures and rising rates that affect consumer spending, the company’s annual revenue increased by nine percent. It lost almost half of its stock value by 2022.

Refinitiv reports that the company’s fourth quarter revenue was $149.2 Billion, which is more than the $145.42 Billion forecast. The company’s advertising revenue came in at $11.56 billion which also exceeded the $11.38 billion forecast.

Andy Jassy is the Amazon CEO. Jassy took over as founder Jeff Bezos’s replacement in July 2021. The company had positive results, but Jassy expressed a cautious outlook on the first quarter. With sales expected to reach between $121 billion-$126 billion, the company expects revenue to rise by four- to eight percent each year. However, analyst projections had shown sales at $125.1 billion. According to Jassy, the company is currently dealing with an unstable economic climate, but she is still upbeat about Amazon’s long-term prospects.

Jassy worked for Amazon over the last year to lower costs. She laid off 18,000 people and put a stop on hiring corporate employees. To reduce costs and stem rising prices, Amazon has put a halt to some plans as well as the plan for expanding its warehouse. Jassy claims that the company is working to reduce retail prices and is “encouraged by the continued progress.”

Amazon’s cloud division, AWS, experienced a slowdown in the fourth quarter, growing only 20 percent as opposed to 27.5 percent in the previous quarter. Due to increasing food and gas prices, consumers are forced to cut back on discretionary spending. Amazon has also been experiencing declining sales for its online store segment. This was a two-percent decrease year-over-year. Due to increasing customer visits to brick-and-mortar shops, the ecommerce boom that was caused by this pandemic is also slowing down.

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Breitbart news reporter Lucas Nolan reports on issues such as free speech and onlinecensorship. Follow him on Twitter @LucasNolan



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