Amazon delivers a surprise US$214m profit in its fourth quarter

30 Jan 2015

E-commerce giant Amazon surprised the markets with a US$214m profit for its fourth quarter on revenues of US$29.3bn, driven by a 50pc increase in Prime membership and the lucrative Christmas shopping season.

Improvements in logistics meant a disastrous backlog of last year was avoided and the company was even able to extend its Christmas cut-off date for online shoppers.

The US$214m profit was the first profit declared by Amazon in four quarters.

For the full year, sales increased 20pc to US$88.9bn, up from US$74.4bn in 2013.

Net loss for 2014 was US$241m, compared with a profit of US$274m in 2013.

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During the fourth quarter, Amazon introduced its Fire TV Stick, which competes with the Google Chromecast, as well as its Echo voice recognition system for shopping.

The company also introduced the Prime Photos service for the cloud as well as its Prime Now service which delivers goods in one and two-hour windows.

The company also said it was increasing its original programming for Amazon Instant Video, buoyed by the performance of its critically-acclaimed Prime-exclusive series Transparent which won two Golden Globes. New pilots include Cocked, Mad Dogs, The Man in the High Castle, Point of Honor, Down Dog, Salem Rogers and The New Yorker Presents.

Amazon Studios said it will produce the first TV series from Oscar winning director Woody Allen. Untitled Woody Allen Project has received a full season order and will be written and directed by Allen.

Amazon also expanded its Amazon Fresh grocery delivery service in the US to Manhattan and Philadelphia.

In the UK, Sunday deliveries grew by a factor of four in the past year as customers there warmed to the idea of receiving orders seven days a week.

“When we raised the price of Prime membership last year, we were confident that customers would continue to find it the best bargain in the history of shopping,” Amazon CEO Jeff Bezos said.

“The data is in and customers agree — on a base of tens of millions, worldwide paid membership grew 53pc last year — 50pc in the US and even a bit faster outside the US.

“Prime is a one-of-a-kind, all-you-can-eat, physical-digital hybrid — in 2014 alone we paid billions of dollars for Prime shipping and invested US$1.3bn in Prime Instant Video. We’ll continue to work hard for our Prime members.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years