Amazon today released the company’s second-quarter fiscal year 2022 financial results. The report showed that Amazon’s net sales for the second quarter were $121.234 billion, up 7 percent compared with $113.080 billion in the same period a year earlier, and up 10 percent excluding the impact of currency changes; net loss was $2.028 billion, compared with net income of $7.778 billion in the same period a year earlier; diluted loss per share was $0.20, compared with Diluted earnings per share were $0.20 compared to $0.76 per share in the prior year period.
Amazon’s second-quarter net sales exceeded Wall Street analysts’ previous expectations, but the diluted loss per share was weaker than expected. At the same time, Amazon’s outlook for fourth-quarter revenue exceeded expectations, driving its after-hours stock price up more than 12 percent.
Key Results.
For the fiscal quarter ended June 30, Amazon reported a net loss of $2.028 billion, or $0.20 per diluted share, which was weaker than the same period a year earlier. for the second quarter of fiscal 2021, Amazon reported net income of $7.778 billion, or $0.76 per diluted share. Amazon’s operating profit for the second quarter was $3.317 billion, compared with $7.702 billion in the prior-year period, and net sales were $121.234 billion, up 7 percent from $113.080 billion in the prior-year period. Excluding a $3.6 billion negative impact from currency movements, Amazon’s second-quarter net sales increased 10 percent year-over-year.
Amazon’s second-quarter sales exceeded Wall Street analysts’ previous expectations, but diluted loss per share was weaker than expected. According to data provided by Yahoo Finance, 37 analysts previously expected Amazon’s second-quarter diluted earnings per share to reach $0.13 on average, and 40 analysts previously expected Amazon’s second-quarter net sales to reach $119.09 billion on average.
In April, Amazon expected second-quarter fiscal 2022 net sales to reach $116 billion to $121 billion, up 3 percent to 7 percent year-over-year, which includes a negative impact of about 200 basis points expected from currency movements. Amazon also projected at the time that operating profit for the second quarter of fiscal 2022 would be -$1 billion to $3 billion, compared with operating profit of $7.7 billion for the same period in fiscal 2021. The aforementioned earnings guidance assumed that the Prime Day event would take place in the middle of the third quarter of 2022.
Operating Data.
Amazon’s net product sales for the second quarter were $56.575 billion, compared with $58.004 billion in the year-ago period, and net service sales were $64.659 billion, compared with $55.076 billion in the year-ago period.
By geography.
- Amazon’s North America segment (U.S., Canada) reported second-quarter net sales of $74.430 billion, up 10 percent from $67.550 billion a year earlier; operating loss was $627 million, compared with an operating profit of $3.147 billion a year earlier.
- Amazon’s International segment (U.K., Germany, France, Japan and China) reported net sales of $27.065 billion in the second quarter, down 12 percent from $30.721 billion in the prior year quarter, and an operating loss of $1.771 billion, compared with an operating profit of $362 million in the prior year quarter.
- Amazon AWS Cloud Services net sales for the second quarter were $19.739 billion, up 33 percent from $14.809 billion a year earlier, and operating profit was $5.715 billion, compared with an operating profit of $4.193 billion a year earlier.
- Amazon’s North American division accounted for 62 percent of total sales in the second quarter, compared with 60 percent in the prior-year period. The percentage of sales from AWS cloud services was 16 percent of total sales compared with 13 percent in the prior year period.
By service and business type.
- Amazon’s net sales from online stores were $50.855 billion in the second quarter, down 4 percent compared with $53.157 billion in the same period last year, and flat excluding the impact of currency movements.
- Net sales from brick-and-mortar stores were $4,721 million, up 12 percent compared to $4,198 million in the same period last year, and up 13 percent excluding the impact of currency movements year-over-year.
- Net sales from third-party seller services of $27,376 million, up 9 percent compared to $25,085 million in the same period last year, and up 13 percent excluding the impact of currency movements year-over-year.
- Net sales from subscription services of $8,716 million, up 10 percent compared to $7,917 million in the same period last year, and up 14 percent excluding the impact of currency movements year-over-year.
- Net sales from AWS Cloud Services of $19.739 billion, up 33 percent compared to $14.809 billion in the prior year period, also up 33 percent excluding the impact of currency movements.
- Net sales from other businesses increased 131 percent to $1,070 million compared to $463 million in the prior year period, and 135 percent excluding the impact of currency movements year-over-year.
Cash Flow Information.
For the 12 months ended June 30, 2022, Amazon’s operating cash flow was $35.6 billion, a 40 percent decrease compared to the same period in the prior year, and for the 12 months ended June 30, 2021, Amazon’s operating cash flow was $59.3 billion.
For the 12-month period ending June 30, 2022, Amazon’s free cash flow is -$23.5 billion, much less than the same period in the prior year; for the 12-month period ending June 30, 2021, Amazon’s free cash flow is $12.1 billion.
After principal repayments, Amazon’s free cash flow for the past 12 months was -$33.5 billion, significantly less than the prior year period, and for the 12 months ended June 30, 2021, Amazon’s free cash flow after the aforementioned items was $0.6 billion.
After principal repayments and assets acquired under capital leases, Amazon’s free cash flow for the past 12 months was -$26.1 billion, significantly less than the prior year period; for the 12 months ending June 30, 2021, Amazon’s free cash flow, net of the aforementioned items, was $4.2 billion.
Performance Outlook.
Amazon expects net sales to reach between $125 billion and $130 billion in the third quarter of fiscal 2022, up 13 percent to 17 percent year-over-year, which includes a negative impact of about 390 basis points from currency movements expected to be available, and this outlook averages $127.5 billion, exceeding analysts’ previous expectations. According to data provided by Yahoo Finance, 39 analysts previously expected Amazon’s third-quarter net sales to reach an average of $126.42 billion.
Amazon also expects operating profit to reach between $0 and $3.5 billion in the third quarter of fiscal 2022, compared with $4.9 billion in the same period in 2021. This outlook assumes no additional business acquisition activity or restructuring activity during the third quarter and no judicial settlement agreements are reached.
Stock price movement.
On the day, Amazon rose $1.31, or 1.08 percent, to close at $122.28 in regular Nasdaq trading. In subsequent after-hours trading through 5:23 p.m. ET Thursday (5:23 a.m. BST Friday), Amazon shares rose another $15.01, or 12.28 percent, to $137.29. In the past 52 weeks, Amazon’s highest price was $188.11 and the lowest price was $101.26.
