Changes in shares of
continue to wreak havoc with reported earnings at
That won’t be a problem for
The two early backer of the electric vehicle startup both reported fourth-quarter numbers Thursday evening.
(ticker: AMZN) reported net income of $300 million for the fourth quarter, down from $14.3 billion reported in the fourth quarter of 2021. It is a huge swing. But included in those numbers are a pre-tax loss of $2.8 billion from changes in the value of Amazon’s Rivian (RIVN) holdings in the fourth quarter of 2022 versus a pre-tax gain of $11.8 billion in the final quarter of 2021.
Rivian stock dropped 44% in the fourth quarter of 2022, closing the year at $18.43 a share. That drove the loss. The gain in 2021 came from the valuation increase tied to the company’s November 2021 initial public offering.
‘s earnings in the fourth quarter included a $100 million loss from the drop in Rivian stock. Ford said in its is fourth-quarter earnings news release that the “monetization” of its Rivian stock was “nearly complete.”
Ford started selling Rivian stock in May of 2022. Cash generated from the sales are part of the reason Ford is paying shareholders a 65-cent special dividend. The total bill for that dividend will be roughly $2.6 billion.
Looking ahead, Ford’s earnings won’t be impacted by Rivian stock moves. Amazon’s will.
Investors don’t really pay all that much attention to Rivian when valuing Amazon. The e-commerce giant owns about 18% of the electric vehicle start up. That is worth about $3.5 billion or 0.3% of Amazon’s $1.15 trillion market capitalization. Even at Rivian stock’s all time high of $179.47 a share, Amazon’s stake was worth about $30 billion. That is still less that 3% of Amazon’s market cap today.
Investors pay more attention to Amazon-only factors. For the fourth quarter, Amazon’s reported operating profit of $2.6 billion beat Street estimates, but its guidance for first-quarter operating profit of $0 to $4 billion was a disappointment. Wall Street is projecting about $4 billion in Q1 operating profit.
Amazon shares are down about 3.8% in after hours trading. Ford stock is down almost 7% in after hours trading. Rivian doesn’t have anything to do with that move. Ford’s fourth-quarter numbers missed analysts estimates, and operating profit guidance of about $10 billion was a little weaker than hoped for.
Rivian stock rose 5.9% in Thursday, trading on a strong day for markets. The
rose 1.5%. The
gained 3.3%. Thursday’s gains leave Rivian shares up about 13% year to date. That’s worth roughly $400 million to
Write to Al Root at email@example.com