Amazon shares plunge as company reports nearly $4 billion loss

Tesla shares fall after Musk poll 0:51

(CNN Business) -

Amazon reported a significant loss in the first three months of the year, sending the company's shares plummeting.

The tech giant said on Thursday it had a net loss of $3.8 billion in the quarter ended March 31, a sharp drop in revenue from the same period last year, when it made a profit of $8.1 billion.

It was also a big miss on the $4.4 billion profit that analysts surveyed by Refinitiv had forecast.

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The company largely attributed this loss to losing $7.6 billion of its investment in electric carmaker Rivian.

Amazon, which led a $700 million investment in 2019, has seen its shares fall by more than 75% since its successful IPO in November 2021.

Amazon shares sank about 10% in after-hours trading following the results.

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

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Amazon's overall revenue grew 7% from the same period last year to $116.4 billion, slightly beating analyst forecasts but slower than the 9% growth in the final months of last year.

The company forecast that revenue growth would slow further next quarter, anticipating a growth rate of between 3% and 7%.

Jassy referenced Amazon's breakneck growth in its consumer business during the pandemic and the "doubling down" of the company's fulfillment network in the past two years.

“Today, since we are no longer chasing physical or headcount capacity, our teams are fully focused on improving productivity and cost efficiency across our fulfillment network,” he added.

"This may take some time, particularly as we work through ongoing supply chain and inflation pressures, but we see encouraging progress across a number of customer experience dimensions."

The company also announced that Prime Day, its annual sales bonanza, will take place this July in more than 20 countries.

The shock to Amazon's earnings comes as the company continues to face pressure from warehouse employees over issues like pay and working conditions.

Workers at a Staten Island, New York, warehouse voted earlier this month to form the e-commerce giant's first US union.

Amazon has since filed an appeal, asking for the entire vote to be repeated.

A separate Amazon union election in Bessemer, Alabama, also recently concluded with results too close to announce.

Both union efforts grew out of worker frustrations with Amazon's treatment of workers amid the pandemic and were also motivated in part by increased national attention to issues of racial justice and labor rights.

Amazon later announced that it would conduct a racial equity audit led by former US Attorney General Loretta Lynch.

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