By - Sanjeeb Baruah
- Amazon’s net income doubled to US$14.3 billion from a year earlier, helped by a pre-tax gain of US$11.8 billion from its Rivian stake.
- Net sales increased by 9% to US$137.4 billion in the quarter, against US$125.6 billion in the same period a year ago.
- The company also announced to increase its Prime membership fees to US$14.99 from US$12.99 for US customers.
Amazon.com Inc (AMZN) on Thursday posted a fourth-quarter profit of US$14.3 billion, boosted by a pre-tax gain from its stake in electric vehicle maker Rivian Automotive.
The stock rose as much as 15% in the after-market hours after dipping nearly 8% in the regular session as part of a broader technology rout on Thursday.
The company also announced raising its Prime membership fees for US customers to offset higher shipping costs and wages after beating Wall Street profit estimates for the holiday quarter.
Amazon’s net income doubled to US$14.3 billion from a year earlier, helped by a pre-tax gain of US$11.8 billion from its Rivian stake.
After robust gains from the at-home shopping surge during the pandemic, the company increased its spending on projects, from hiring workers to expanding warehouses to fight the pandemic disruptions.
Its expenses also soared due to bonuses paid to retain workers and higher shipping costs.
Amazon’s net sales increased by 9% to US$137.4 billion in the quarter, against US$125.6 billion in the same period a year ago.
The net income increased to US$14.3 billion, or US$27.75 per diluted share, from US$7.2 billion, or US$14.09 per diluted share, in the fourth quarter of 2020.
The fourth-quarter net income includes a pre-tax gain of US$11.8 billion from its stock investments in Rivian, which completed an initial public offering last November.
The operating income fell to US$3.5 billion versus US$6.9 billion a year ago.
The full-year net sales were up 22% to US$469.8 billion, against US$386.1 billion in 2020.
The operating income was up US$24.9 billion from US$22.9 billion in 2020.
The full-year net income rose to US$33.4 billion, or US$64.81 per diluted share, from US$21.3 billion, or US$41.83 per diluted share, in 2020.
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Amazon hikes US Prime membership fees
The Seattle, Washington based e-commerce giant on Thursday announced to increase the prices of its Prime membership to US$14.99 from US$12.99, and the annual plan from US$119 to US$139.
The change would be effective from February 18 for new members. The last increase in the annual fees for Prime membership for US customers was four years ago.
Amazon has more than 200 million Prime paid subscribers globally. CFO Brian Olsavsky told reporters that Amazon’s Revenue Prime members grew “significantly during the pandemic”.