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https://www.barrons.com/articles/amazon-misses-rally-8a6e2511
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Things move quickly in the world of artificial intelligence. It is easy to sit back and complain about developments that could be disruptive, but sometimes investors are best served by putting emotions aside and observing new developments and how they affect markets. Could AI developments and related trends make you a lot of money?
Below is a new screen showing a group of AI-oriented companies expected to increase their sales most rapidly through 2025, based on consensus estimates among analysts polled by FactSet. Then we show expected revenue growth rates for the largest AI-oriented companies in the screen.
Over the long haul, many businesses might perform more efficiently by employing AI. Maybe this technology can create an economic revolution similar to the one that moved the majority of the working population away from agricultural labor during the 19th and 20th centuries.
Back in February, we screened 96 stocks held by five exchange-traded funds focused on AI and related industries and listed the 20 that analysts thought would rise the most over the following 12 months.
Three months is a long time for AI, and the shakeout hasn’t even started.
Read: Congress and tech seem open to regulating AI efforts, but that doesn’t mean it will happen
There is no way to predict how politicians will react to perceived or real threats of AI and machine learning. And the largest U.S. tech players are doing everything they can to employ the new technology and remain dominant. But that doesn’t mean they will grow more quickly than smaller AI-focused players.
Once again we will begin a screen with these five ETFs:
Altogether and removing duplicates, the five ETFs hold 270 stocks of companies in 23 countries. We first narrowed the list to 197 covered by at least nine analysts and for which consensus sales estimates are available through calendar 2025. We used calendar-year estimates because some companies have fiscal years that don’t match the calendar.
Here are the 20 screened AI-related companies expected by analysts to have the highest compound annual growth rates (CAGR) for sales from 2023 through 2025. Sales estimates are in millions of U.S. dollars. The list also shows which of the above five ETFs holds each stocks.
| Company | Ticker | Estimated sales – 2023 ($mil) | Estimated sales – 2024 ($mil) | Estimated sales – 2025 ($mil) | Two-year estimated sales CAGR through 2025 | Held by |
| BioXcel Therapeutics Inc. |
BTAI, |
$5 | $39 | $121 | 411.5% | WTAI |
| Luminar Technologies Inc. Class A |
LAZR, |
$86 | $266 | $588 | 161.0% | ROBT, WTAI |
| BlackBerry Ltd. |
BB, |
$685 | $769 | $1,925 | 67.6% | ROBT |
| Credo Technology Group Holding Ltd. |
CRDO, |
$183 | $259 | $363 | 40.9% | IRBO |
| SentinelOne Inc. Class A |
S, |
$619 | $881 | $1,176 | 37.9% | WTAI |
| Wolfspeed Inc. |
WOLF, |
$982 | $1,323 | $1,860 | 37.6% | WTAI |
| SK hynix Inc. |
000660, |
$18,319 | $27,899 | $34,542 | 37.3% | WTAI |
| Mobileye Global Inc. Class A |
MBLY, |
$2,109 | $2,782 | $3,920 | 36.3% | ROBT, WTAI |
| Snowflake Inc. Class A |
SNOW, |
$2,811 | $3,863 | $5,139 | 35.2% | IRBO, THNQ, WTAI |
| Lemonade Inc. |
LMND, |
$395 | $471 | $712 | 34.2% | THNQ, WTAI |
| Nio Inc. ADR Class A |
NIO, |
$11,874 | $16,733 | $21,304 | 33.9% | ROBT |
| Stem Inc. |
STEM, |
$607 | $833 | $1,055 | 31.8% | WTAI |
| Upstart Holdings Inc. |
UPST, |
$547 | $768 | $938 | 31.0% | BOTZ, WTAI |
| Cloudflare Inc. Class A |
NET, |
$1,284 | $1,669 | $2,194 | 30.7% | THNQ |
| Samsara Inc. Class A |
IOT, |
$830 | $1,062 | $1,364 | 28.2% | THNQ |
| Ambarella Inc. |
AMBA, |
$287 | $355 | $472 | 28.2% | IRBO, ROBT, THNQ, WTAI |
| iflytek Co. Ltd. Class A |
002230, |
$3,561 | $4,582 | $5,851 | 28.2% | THNQ |
| Tesla Inc. |
TSLA, |
$99,558 | $128,412 | $161,061 | 27.2% | ROBT, THNQ, WTAI |
| CrowdStrike Holdings Inc. Class A |
CRWD, |
$2,935 | $3,793 | $4,739 | 27.1% | THNQ, WTAI |
| PB Fintech Ltd. |
543390, |
$358 | $462 | $573 | 26.5% | IRBO |
| Source: FactSet | ||||||
Click the tickers for more about each company or ETF.
Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote pages.
We have screened for expected revenue growth, rather than for earnings or cash flow, because in a newer tech-oriented business area, investors are most likely to consider the top line as companies sacrifice profits to build market share.
It is important to do your own research if you consider purchasing any individual stock, to form your own opinion about a company’s ability to remain competitive over the long term. Starting from the top of the list, BioXcel Therapeutics Inc.
BTAI,
is expected to show exponential sales growth, but that is from a low expected baseline this year.
What about the largest AI-related companies held by these ETFs?
Here are the largest 20 companies in the screen by market capitalization, ranked by expected sales CAGR from 2022 through 2025. Once again the sales estimates are in millions of U.S. dollars, but the market caps are in billions.
| Company | Ticker | Estimated sales – 2023 ($mil) | Estimated sales – 2024 ($mil) | Estimated sales – 2025 $mil) | Two-year estimated sales CAGR through 2025 | Market Cap ($bil) | Held by |
| Tesla Inc. |
TSLA, |
$99,558 | $128,412 | $161,061 | 27.2% | $528 | ROBT, THNQ, WTAI |
| Nvidia Corp. |
NVDA, |
$29,839 | $36,877 | $46,154 | 24.4% | $722 | BOTZ, IRBO, ROBT, THNQ, WTAI |
| Taiwan Semiconductor Manufacturing Co. Ltd. ADR |
TSM, |
$71,434 | $86,284 | $101,112 | 19.0% | $445 | ROBT, WTAI |
| Advanced Micro Devices Inc. |
AMD, |
$22,976 | $26,823 | $30,359 | 15.0% | $163 | IRBO, ROBT, THNQ, WTAI |
| ASML Holding NV ADR |
ASML, |
$28,974 | $32,374 | $37,796 | 14.2% | $263 | THNQ, WTAI |
| Microsoft Corp. |
MSFT, |
$223,438 | $251,028 | $282,397 | 12.4% | $2,318 | IRBO, ROBT, THNQ, WTAI |
| Samsung Electronics Co. Ltd. |
005930, |
$200,595 | $227,286 | $252,129 | 12.1% | $292 | IRBO, WTAI |
| Amazon.com Inc. |
AMZN, |
$559,438 | $626,549 | $702,395 | 12.1% | $1,164 | IRBO, ROBT, THNQ, WTAI |
| Adobe Inc. |
ADBE, |
$19,470 | $21,784 | $24,276 | 11.7% | $158 | IRBO, THNQ |
| Netflix Inc. |
NFLX, |
$33,915 | $38,067 | $42,275 | 11.6% | $148 | IRBO, THNQ |
| Tencent Holdings Ltd. |
700, |
$88,727 | $99,212 | $110,556 | 11.6% | $422 | IRBO, ROBT |
| Salesforce Inc. |
CRM, |
$34,392 | $38,273 | $42,786 | 11.5% | $205 | IRBO, THNQ |
| Alphabet Inc. Class A |
GOOGL, |
$299,810 | $333,077 | $369,195 | 11.0% | $710 | IRBO, ROBT, THNQ, WTAI |
| Intel Corp. |
INTC, |
$51,060 | $57,799 | $62,675 | 10.8% | $122 | IRBO, ROBT |
| Meta Platforms Inc. Class A |
META, |
$125,901 | $139,545 | $154,259 | 10.7% | $528 | IRBO, WTAI |
| Alibaba Group Holding Ltd. ADR |
BABA, |
$134,140 | $148,206 | $162,199 | 10.0% | $235 | ROBT, THNQ |
| Texas Instruments Inc. |
TXN, |
$17,941 | $19,433 | $20,799 | 7.7% | $148 | IRBO |
| Apple Inc. |
AAPL, |
$390,845 | $416,761 | $445,956 | 6.8% | $2,706 | IRBO, WTAI |
| Siemens Aktiengesellschaft |
SIE, |
$84,681 | $89,145 | $93,925 | 5.3% | $130 | ROBT |
| Johnson & Johnson |
JNJ, |
$98,761 | $100,990 | $103,870 | 2.6% | $414 | ROBT |
| Source: FactSet | |||||||
Tech-stock picks that are small and focused: This fund invests in unsung innovators. Here are 2 top choices.
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Mullen Automotive Inc. is attracting more meme-like attention from retail investors than traditional meme stock darlings AMC Entertainment Holdings Inc. and GameStop Corp., according to an influential meme-stock trader.
The electric vehicle company’s stock has become the “meme go to” for retail investors, said the trader, who goes by the name Obi. The trader participates in the WallStreetBets group on Reddit under the user name Major-Access2321.
Obi, whose Making Easy Money YouTube channel has over 28,000 subscribers, said that Mullen
MULN,
is generating plenty of buzz across social media. “When it comes to meme stock world on Reddit, Twitter and now even Facebook, groups are popping up calling themselves the ‘MULN army’,” he told MarketWatch.
The trader said that “less and less” people are speaking about AMC Entertainment
AMC,
and GameStop
GME,
“More and more people are speaking about MULN … they call it the meme that makes sense,” he added.
Mullen shares have seen a dramatic spike in trading volume recently, with average trading volume of 1.1 billion shares Wednesday and 547.8 million shares over the past five days, according to FactSet data. The stock’s 65-day average trading volume is 279 million shares. Mullen ended Wednesday’s session down 21.1% on the company’s announcement of a reverse stock split.
Related: Mullen Automotive shares plunge on reverse stock split announcement
AMC’s stock ended Wednesday’s session up 4.4% on trading volume of 25.1 million shares, below its 65-day average trading volume of 35.4 million shares. GameStop’s stock closed up 1.7% Wednesday on trading volume of 3.2 million shares, below its 65-day average of 4.8 million shares.
The stock was down 18% on Thursday.
The over outlook for the EV market looks bright, according to Obi. “Retail feel like they have something special here with MULN,” he added.
On Wednesday Mullen Automotive Inc. announced that it will conduct the 1-for-25 reverse stock split as the electric-vehicle company looks to maintain its Nasdaq listing.
The stock will continue to trade on the Nasdaq Capital Market under the existing symbol “MULN” and will begin trading on a split-adjusted basis at market open Thursday.
In March, Mullen announced that the Nasdaq had approved the company’s request for a 180-day extension to meet the $1 minimum-bid-price requirement. On Sept. 7, 2022, the Nasdaq notified the company that its stock was not compliant with rules as it had traded below $1 for more than 30 days.
Related: After TOP Financial’s surge, influential meme-stock trader looks for next big opportunity
Mullen’s stock soared last year after Amazon.com Inc.’s
AMZN,
delivery partner placed an order for up to 600 cargo vans, and the company has since teamed up with Rapid Response Defense Systems to supply vans for federal government business.
In December, Mullen announced that it is partnering with Loop Global Inc. to build public and private EV-charging technology, infrastructure and network solutions. Earlier this year, Mullen joined forces with Qiantu Motors to launch what they called an EV supercar.
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Hollywood writers are on strike for the first time in 15 years, halting production of TV shows and movies.
The Writers Guild of America announced Monday night its boards unanimously approved a strike effective 12:01 a.m. Tuesday. “Picketing will begin tomorrow afternoon,” the WGA said in a tweet Monday night.
The WGA said the decision was…
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Amazon.com Inc. shares zoomed higher in extended trading Thursday after the company posted its biggest quarterly profit since 2021, but shares turned around after the company’s chief financial officer said in a conference call that cloud revenue is decelerating in the current quarter.
Amazon AMZN reported that first-quarter revenue grew to $127.4 billion from $116.44 billion in the same quarter last year. Profit reached $3.17 billion, or 31 cents a share, improving from a loss of 38 cents a share a year ago, which was Amazon’s…
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Amazon.com Inc. shares zoomed higher in extended trading Thursday after the company posted its biggest quarterly profit since 2021, but shares turned around after the company’s chief financial officer said in a conference call that cloud revenue is decelerating in the current quarter.
Amazon AMZN shares jumped more than 10% in after-hours trading immediately following the release of first-quarter results, but those gains disappeared after Chief Financial Officer Brian Olsavsky said in a conference call with analysts that…
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It’s the end of the road for Bed Bath & Beyond Inc., a company that was once a shining star of U.S. retail.
The troubled home-goods retailer BBBY filed for chapter 11 on Sunday, after spending several months teetering on the brink of bankruptcy. The company said it aims to achieve an orderly wind down of its operations, while also seeking to find an interested buyer for some or all of its assets. It has $240 million of debtor-in-possession financing to provide the liquidity needed to support its operations through the process….
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Amazon.com Inc. is eliminating another 9,000 jobs, the company announced Monday morning.
In a memo to staff, Amazon
AMZN,
Chief Executive Andy Jassy said the cuts would take place over the next few weeks and primarily affect Amazon Web Services, People Experience and Technology Solutions, advertising and Twitch. [Twitch CEO Dan Clancy broke the news of 400 layoffs to employees in a blog post later Monday.]
“This was a difficult decision, but one that we think is best for the company long term,” Jassy wrote.
“For several years leading up to this one, most of our businesses added a significant amount of headcount,” Jassy added. “This made sense given what was happening in our businesses and the economy as a whole. However, given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”
The news sent the retailer’s stock down 1% in trading Monday.
The latest layoffs, amid a challenging macroeconomic climate that has claimed tens of thousands of jobs in the tech industry, follow an earlier round at Amazon, announced in November, that affected more than 18,000 employees. Additionally, Amazon has paused construction of its second headquarters in Virginia.
At the same time, there are rumblings out of the Beltway that the Biden administration is preparing legal actions against Amazon stemming from investigations into its business practices, according to a report in Politico.
Amazon is the second Big Tech company this month to announce additional job cuts. Last week, Mark Zuckerberg, CEO of Facebook parent Meta Platforms Inc.
META,
wrote in a blog post the social-networking company would slash 10,000 more employees as it focuses on a “year of efficiency.” The move drove Meta shares up 7% and helped the company top $500 billion in market value for the first time since June.
In November, the company said it would cut 11,000 employees, or about 13% of its workforce, in the first layoffs in the company’s 18-year history.
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Rivian Automotive shares are basically free, the latest evidence, if any was needed, that the stock market is hard to figure out.
Shares of the electric- truck start-up (ticker: RIVN) fell for a fourth consecutive day on Tuesday. First there was the banking crisis, which hit most stocks last week. Then the market learned Monday that Rivian might end its exclusivity pact with
Amazon.com
(AMZN), freeing up the auto maker to sell electric vans to other customers.
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Shares of
Rivian Automotive
fell after a report said the electric truck start-up is in talks to end an exclusivity pact with Amazon.com. That might have been an overreaction, judging by Amazon’s response to the news.
The Wall Street Journal reported Monday that Rivian (ticker: RIVN) is seeking to remove an exclusivity term in its agreement with Amazon (AMZN) after the e-commerce retailer ordered about 10,000 electric delivery vans for this year, which was on the lower end of Amazon’s range.
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Rivian Automotive Inc.’s stock fell more than 3% Monday after news that the electric-vehicle maker and Amazon.com Inc. are discussing possible changes to their deal for electric delivery vans.
Citing people familiar with the matter, the Wall Street Journal reported Monday that the companies are in talks to end the exclusivity part of their electric-van deal. The talks started after Amazon’s order for the year was at the low end of the previous range, the report said.
A…
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Silicon Valley could use a reboot. The biggest players aren’t growing, and more than a few are seeing sharp revenue declines. Regulators seem opposed to every proposed merger, while legislators push for new rules to crack down on the internet giants. The Justice Department just can’t stop filing antitrust suits against Google. The initial public offering market is closed. Venture-capital investments are plunging, along with valuations of prepublic companies. Maybe they should try turning the whole thing on and off.
The only strategy that seems to be working is to lay people off. Tech CEOs suddenly are channeling Marie Kondo, tidying up and keeping only the people and projects that “spark joy,” or at least support decent operating margins. Layoffs.fyi reports that tech companies have laid off more than 122,000 people already this year.
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This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
https://www.barrons.com/articles/stock-market-movers-5b0c54ae
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Wall Street’s expectations for 2023 have been diving as forecasts for the new year come in light, and the news could get worse once they factor in disappointing results from Big Tech. But at least Bob Iger is coming back for a sequel.
Google, Facebook, Amazon and Apple all disappointed with holiday earnings this week. Their forecasts ranged from nonexistent to piecemeal to meh, and the fallout will only add to the biggest dive in Wall Street’s expectations through the beginning of a year since 2016.
Analysts’ average forecast for 2023 earnings from the S&P 500 index
SPX,
dropped by 2.5% in January, according to FactSet Senior Earnings Analyst John Butters, the worst in seven years. Those projections began heading lower last year, and the decline is only steepening — analysts are now projecting 3% earnings growth in 2023, and that is contingent on a big holiday rebound from the results being released this quarter.
The news was even worse for the first quarter, for which projections declined 3.3% in January as companies whiffed on their forecasts at a rapid pace: 86% of the 43 companies that have guided for first-quarter earnings have missed projections, Butters reported. Earnings are now expected to decline 4.2%, which would be the first year-over-year earnings decline since the third quarter of 2020, when the COVID-19 pandemic write-offs started to come in.
Big Tech only added to the downward trajectory in recent days. Amazon.com Inc.
AMZN,
missed on its holiday earnings as well as its forecast for the first quarter, and that company could determine if S&P 500 profits rise in 2023 all on its own. Amazon’s worst holiday earnings since 2014 could also contribute to the consumer discretionary sector’s first earnings decline since the beginning of the pandemic, with holiday sector earnings now expected to drop more than 5%.
Google parent Alphabet Inc.
GOOGL,
GOOG,
and Facebook parent Meta Platforms Inc.
META,
also missed their respective earnings targets amid problems with the digital-advertising industry, leading to the communications-services sector having the worst earnings season in the S&P 500. Profit has declined 25.2% in that sector so far, the worst among the 11 S&P 500 sectors, but would be down just 6.5% without the effects of Meta and Alphabet, Butters reported.
Apple Inc.
AAPL,
also didn’t do projections any favors, reporting its biggest sales decrease since 2016 and an earnings miss Thursday afternoon. In a piecemeal forecast, executives projected a similar sales decline in the calendar first quarter, though unofficially.
After the busiest week in earnings season wrapped up, don’t expect much of a breather — 95 S&P 500 companies are expected to report in the week ahead, the third consecutive week with at least 90 companies reporting. There will be plenty of intrigue among companies not in the S&P 500 too, including Robinhood Markets Inc.
HOOD,
and Affirm Holdings Inc.
AFRM,
reporting together on Wednesday afternoon.
Only one Dow Jones Industrial Average
DJIA,
stock will report, but that is the Wednesday call you will want to tune in for: Bob Iger’s return to the Walt Disney Co.
DIS,
earnings show.
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The Federal Trade Commission is preparing a possible antitrust lawsuit against Amazon.com Inc.
AMZN,
the Wall Street Journal reported Friday, citing people familiar with the matter. The suit could challenge many of the tech giant’s business practices as being anticompetitive, the people said. Amazon officials have not yet had meetings with FTC commissioners to argue against any suit, but the agency has been reviewing the company’s practices to determine whether it favors its own products over competitors’ on its platform, and how it treats third-party sellers on Amazon.com, some of the people said. Amazon and the FTC declined to comment to the paper. Amazon stock is down 4.4% Friday, after it reportedits least profitable holiday quarter since 2014 late Thursday and biggest annual loss on record, along with a forecast miss.
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This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
https://www.barrons.com/articles/stock-market-movers-apple-amazon-google-ford-51675354870
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Amazon.com Inc. reported its least profitable holiday quarter since 2014 on Thursday, leading to the biggest annual loss on record for the e-commerce giant, which also disappointed Wall Street with its forecast amid concerns about cloud growth.
Amazon
AMZN,
reported a holiday profit of $278 million, or 3 cents a share, down from $1.39 a share a year ago. Revenue increased to $149.2 billion from $137.41 billion a year ago. Analysts on average were expecting earnings of 17 cents a share on sales of $145.71 billion, according to FactSet.
Shares fell 5% in after-hours trading following the release of the results, after closing with a 7.4% increase at $112.91.
“In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon,” Chief Executive Andy Jassy said in a statement.
Amazon was expected to post a loss for the whole year for the first time since 2014, but worse-than-expected holiday earnings actually led Amazon to the company’s worst annual loss on record. For the year, Amazon produced a net loss of $2.7 billion and revenue of $513.98 billion, up from $469.82 billion a year ago and the company’s first annual sales total to surpass a half-billion dollars. Amazon had never lost more than $1.4 billion in a single year since going public in 1997, according to FactSet records.
Amazon’s fourth-quarter profit was hindered again by the decline of Rivian Automotive Inc.
RIVN,
stock, which cost Amazon $2.3 billion in net income in the quarter. In addition, Amazon recognized many of the costs of its recently announced layoffs and other cost cuts in fourth-quarter results as well — a $2.7 billion impairment charge included $640 million in severance charges related to layoffs and $720 million related to closures and impairment of physical stores, Chief Financial Officer Brian Olsavsky said in a call with reporters.
Without those charges, Amazon would have exceeded expectations, and recognizing them in 2022 leaves a cleaner sheet for this year, when Amazon’s ability to return to strong profitability will be the focus of Wall Street. The end result will likely rest on Amazon Web Services, or AWS, the cloud-computing offering that has supplied the bulk of Amazon’s profit in recent years, including 2022. Last year, AWS had operating profit of $22.84 billion, while the rest of the business produced an operating loss of $10.59 billion.
But cloud-computing growth has slowed, as Microsoft Corp.
MSFT,
displayed in its results and forecast last week, and Olsavsky confirmed the slowdown Thursday after AWS results missed expectations and suggested revenue growth had slowed to mid-teens and could stay there.
“Starting back in the middle of the third quarter of 2022, we saw our year-over-year growth rates slow as enterprises of all sizes evaluated ways to optimize their cloud spending in response to the tough macroeconomic conditions,” he said in a conference call with analysts. “As expected, these optimization efforts continued into the fourth quarter.”
Olsavsky told reporters he expected “slower growth rates for the next few quarters” for AWS, and later disclosed to analysts that revenue growth was in the mid-teens in the first month of this year. He noted that AWS revenue growth rates had been hit by customers looking to cut their cloud spending, and “we expect these optimization efforts will continue to be a headwind to AWS growth in at least the next couple of quarters.”
Opinion: The cloud boom has hit its stormiest moment yet, and it is costing investors billions
Making his first appearance on an earnings call since being named CEO two years ago, Jassy — who led AWS before being promoted to replace Jeff Bezos as CEO — said “if it’s good for our customers to find a way to be more cost effective in an uncertain economy, our team is going to spend a lot of cycles doing that.”
“We’re the only ones that really break out our cloud numbers in a more specific way, so it’s always a little bit hard to answer your question about what we see,” Jassy said to an analyst asking about the larger cloud industry, while referencing rival Microsoft’s refusal to provide full financial information about Azure. “But to our best estimations, when we look at the absolute dollar growth year over year, we still have significantly more absolute dollar growth than anybody else we see in this space.”
In the fourth quarter, AWS produced operating income of $5.21 billion on revenue of $21.38 billion, with sales growing more than 20% and operating income declining slightly. Analysts on average were expecting profit of $5.73 billion on sales of $21.85 billion, according to FactSet.
Any slowdown in AWS would hit Amazon’s bottom line as well as its overall top line, and executives’ forecast for the first quarter shows less optimism than Wall Street expected. Amazon’s guidance calls for operating profit of break-even to $4 billion and revenue of $121 billion to $126 billion, while FactSet recorded an average analyst forecast of $4.04 billion in operating profit on sales of $125.09 billion.
Amazon’s e-commerce business has struggled for growth amid the worst inflation in decades, with Olsavsky saying in a call with reporters that Amazon “saw customers spend less on discretionary items… [while] continuing to spend on everyday essentials.” Amazon recently announced it would start charging for grocery delivery for Prime members, which could increase revenue from sales of fresh food.
For more: Amazon Fresh to start charging Prime customers up to $10 for grocery deliveries
Amazon’s domestic e-commerce business posted an operating loss of $240 million on sales of $93.36 billion, after a $206 million loss on sales of $82.36 billion in the holiday quarter of 2021. Olsavsky said cuts in the company’s physical stores and device businesses would improve operating margins in North America.
Amazon’s international efforts struggled more, with a sales decline and increasing losses, as Olsavsky said the U.K. and other parts of Europe showed slowdowns. Amazon reported an operating loss of $2.23 billion on revenue of $34.46 billion overseas, after a loss of $1.63 billion on sales of $37.27 billion a year ago.
One bright spot in Amazon’s report was a record quarter for its advertising business, which has grown fast in recent years in a challenge to Alphabet Inc.’s
GOOGL,
GOOG,
Google and other online ad giants. Ads brought in $11.56 billion in the holiday quarter, growing nearly 19% from $9.71 billion a year ago and beating the analysts’ consensus.
Amazon stock has fallen more than 25% over the past 12 months, but has experienced a rebound so far in 2023, gaining more than 33% year to date. The S&P 500 index
SPX,
has declined 10.2% in the past year while gaining 7.3% since the calendar flipped to 2023.
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The federal government on Wednesday hit Amazon.com Inc. with worker-safety related citations and penalties at three more warehouses, two weeks after issuing citations at the company’s warehouses in three different states.
The latest citations are the result of the Occupational Safety and Health Administration’s investigation of Amazon
AMZN,
warehouses stemming from referrals from the U.S. Attorney’s Office for the Southern District of New York. At all six locations, OSHA investigators cited the company for exposing warehouse workers to a high risk of low back injuries and other musculoskeletal disorders and asked for a multitude of changes and corrections.
“Amazon’s operating methods are creating hazardous work conditions and processes, leading to serious worker injuries,” said OSHA Assistant Secretary Doug Parker in a statement Wednesday. “They need to take these injuries seriously and implement a company-wide strategy to protect their employees from these well-known and preventable hazards.”
See: Amazon cited for warehouse working conditions ‘designed for speed but not safety’
The newest citations come from investigations into Amazon warehouses in Aurora, Colo.; Nampa, Idaho; and Castleton, N.Y. At all three sites, OSHA inspectors concluded that workers are suffering from musculoskeletal injuries “as a result of lifting heavy items while attempting to meet pace of work and production quotas,” according to each of the hazard letters that were sent to those warehouses’ operations managers. Those concerns were similar to those raised by OSHA at the three other Amazon warehouses in Florida, Illinois and a different warehouse in New York a couple of weeks ago.
In Aurora and Nampa, inspectors also found evidence that injuries may not have been reported because Amazon’s on-site first-aid clinic “was not staffed appropriately.” In Castleton, staffers at the company’s on-site clinic, known as AmCare, “question whether workers are actually injured, pressure injured workers to work through their injuries, and steer injured workers to Amazon-preferred doctors,” Rita Young, OSHA area director, wrote in the hazard letter.
The penalties associated with the citations at the three sites total $46,875. OSHA also asked Amazon to detail the changes it makes in response, and said the company’s response will determine whether more evaluation is needed. In addition, the agency’s inspectors may do follow-up visits within the next six months.
Just like with the first three citations, Amazon intends to appeal.
“We take the safety and health of our employees very seriously, and we don’t believe the government’s allegations reflect the reality of safety at our sites,” Amazon spokeswoman Kelly Nantel said in an emailed statement.
A company spokeswoman also referred to several safety-related efforts by the company, including its partnership with the National Safety Council; equipment that’s supposed to help reduce the need for twisting, bending and reaching; and “process improvements” designed by Amazon’s robotics team.
In anticipation of Wednesday’s OSHA citations, a group of worker advocates held a virtual news conference Tuesday. Among the panelists was Debbie Berkowitz, a former chief of staff at OSHA and now a fellow at the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University.
“I want to make it clear to everybody that these OSHA citations are incredibly historic and significant,” Berkowitz said. “Don’t get thrown by the low amount of penalties,” she added, saying the Occupational Safety and Health Act is a “weak law.”
She went on to say that “OSHA really grounded their investigations using doctors, experts, and what to do to mitigate the hazards… They show that Amazon needs to take action.”
Also present on the news conference was Amazon warehouse worker Jennifer Crane, from St. Peters, Mo.
“I’m glad to see OSHA investigate the safety crisis at Amazon,” she said. “The company blames us for getting injured. They push us to work at unrealistic speeds.”
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