Amazon's surprise profits, impressive Prime growth send shares skywardBy Shawn Knight
Amazon reported $29.33 billion in sales during the fourth quarter en route to a profit of $214 million, or $0.45 per share. Margins like that may not get it done for most businesses but with Amazon, it was enough to excite investors and send its stock climbing by nearly 13 percent.
For what it's worth, Amazon actually missed Wall Street's expectations of $29.7 billion in revenue. In terms of profit, however, the online retailer destroyed forecasts of $0.17 per share.
The past year hasn't been particularly kind to Amazon, especially after taking a $170 million charge during the third quarter on its failed Fire Phone endeavor. In the second quarter, Amazon posted a loss of $126 million which was far greater than analysts had forecasted.
Amazon founder and CEO Jeff Bezos also revealed that Amazon Prime is doing remarkably well despite a price hike that many criticized. Using some choice words, Bezos said that on a base of tens of millions, worldwide paid membership grew 53 percent last year. In the US, it grew by 50 percent.
To translate, Amazon probably had around 10 million Prime members and likely added another 5.3 million or so in 2014. It's clear that adding more features to its Prime membership is paying dividends.
For the first quarter of 2015, Amazon is expecting to bring in revenues of $20.9 billion to $22.9 billion.