Amazon Touts Close Of MGM Deal; Stock Dips On $3.8 Billion Q1 Loss, Soft Q2 Forecast

Amazon saw revenue nose up 7% to $116 billion but swung to a net loss of $3.8 billion in the first quarter.

The red ink includes a $7.6 billion hit from Amazon’s investment in electric carmaker Rivian Automotive – it would have turned a profit otherwise. But investors concerned on a few fronts dinged the stock, which dropped 9% in after-hours trading.

“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” said CEO Andy Jassy, Amazon, noting ongoing inflationary and supply chain pressures.

But earnings commentary included a long section on “Entertainment” high up (second, after “Shopping”) in the release, starting with the close of Amazon’s $8.45 billion purchase of MGM. It’s significant because the placement of specific businesses in the dump of commentary Amazon crowds into its report each quarter is quite intentional — indicating a higher profile for the growing studio division that has usually been an asterisk.

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“MGMatest In Earnings employees joined Prime Video and Amazon Studios. The storied, nearly century-old studio has more than 4,000 film titles, 17,000 TV episodes, 180 Academy Awards, and 100 Emmy Awards. The catalog includes franchise favorites such as James Bond, Rocky, and Legally Blonde, and classic movies such as Thelma & Louise, The Silence of the Lambs, The Magnificent Seven, and Raging Bull. The deal complements Prime Video and Amazon Studios’ work in delivering a diverse slate of original films and TV shows to a global audience and will create even more opportunities to deliver quality storytelling to customers,” the company wrote.

(Not all MGM employees joined – earlier this week news broke that MGM motion picture group chairman Michael De Luca and president Pam Abdy are leaving.)

Prime Video, which has over 200 million members, comes as a free perk for subscribers of Amazon Prime, the world’s biggest customer loyalty program that offers consumers free shipping. Amazon doesn’t release Prime Video stats on a regular basis but last said that over 200 million Amazon Prime subscribers had streamed Prime Video content during the 12 months ending in Jan. of 2021. Prime membership can fluctuate, but the uptake is clearly big.

Amazon also reminded that the teaser trailer for The Lord of the Rings: The Rings of Power broke a global record for the most-watched entertainment trailer to debut during a Super Bowl telecast, with 257 million views globally in the first 24 hours of its release.

It touted exclusive coverage of NFL Thursday Night Football starting this fall; the fact that Prime Video was the first streaming service to exclusively carry a major awards show live March 7 with the 57th annual Academy of Country Music Awards; that Reacher and The Marvelous Mrs. Maisel landed so well on Nielsen’s Streaming Top 10 list. It also noted Prime Video series Upload, Outer Range and Lizzo’s Watch Out for the Big Grrrls; and it referenced Prime Video’s debut of 30 local originals internationally.

The conference call itself was dominated by questions about supply chain pressures and the more technical aspects of Amazon’s businesses, which are led by e-commerce, Amazon Web Services, subscription services and a a growing advertising biz.