Amazon posts Q4 profit of $214 million on sales of $29.3 billion
Amazon.com Inc posted fourth quarter profit of $214 million on sales of $29.3 billion (a 15% increase year-over-year) after a period of two straight losses.
The results indicate that the company is still capable of making profit and should give CEO Jeff Bezos a sigh of relief.
However, Bezos did not make any promises that the company will perform as well in the next quarter though.
Amazon shares soared in extended trading (after the results were made public).
In extended trading shares gained 12 percent after closing at $311.78 in New York. Last year the stock fell by 22 percent, compared to an 11 percent increase in the Standard & Poor’s 500 Index.
Despite an improvement in the fourth quarter, the company still posted its first annual loss in 12 years for 2014. Hopefully it will say on course now.
According to Amazon executives, the company will continue to spend on projects such as building data centers for the cloud-computing division and fulfillment centers for faster delivery of goods.
The results eased concerns that Bezos has been spending too much on projects to make deliveries faster and offer original video programming, as opposed to projects that would make money.
But these initiatives are thought to have been what helped the company achieve so much success over the holiday season success, as it focuses on the speed and value that Amazon customers expect.
The Amazon prime subscriber base is growing 53% globally and 50% in the U.S., and prime members spend more than double non-members.
“We see that Prime members are buying more; that speed of delivery helps,” chief financial officer Thomas Szkutak told investors during today’s call. He also reinforced the company’s focus on value: “We need to make sure we have great prices; it’s something we’re very focused on.”
Amazon Web Services, which is the company’s cloud-computing business segment, will soon by launching WorkMail, an email and calendar service that will cost $4 per inbox, a competitive and similar price to other corporate email offerings from market leaders Google and Microsoft.
“We’re excited overall about our web services offerings. In terms of the future roadmap, we’re not talking about that, you’ll have to stay tuned,” Szkutak said in response to an analyst question about Amazon’s SaaS operations.