Amazon Q4: Sales Up, Profits Down

Investments contributed to full-year loss
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Investments contributed to full-year loss
Amazon.com reported a 15 percent increase in net sales, to $29.3 billion, and a 10.5 percent decline in earnings, to $214 million, for its fourth quarter ended Dec. 31.

Seattle – Amazon.com reported a 15 percent increase in net sales, to $29.3 billion, and a 10.5 percent decline in earnings, to $214 million, for its fourth quarter ended Dec. 31.

Excluding the impact of unfavorable exchange rates, sales would have risen 18 percent, the company said.

But increased outlays for fulfillment, marketing, and technology and content weighed on earnings – which nonetheless exceeded Wall Street expectations and drove a rally in Amazon shares.

In North America, sales of electronics and other general merchandise rose 27 percent to $13.5 billion, and sales of media edged up 1 percent to $3.5 billion.

For the full year, net sales rose 20 percent to $89 billion while the company posted a net loss of $241 million, compared to a prior-year profit of $274 million.

In a statement, founder/CEO Jeff Bezos focused on Amazon’s Prime membership program, for which it paid billions of dollars for expedited shipping and invested $1.3 billion in streaming video services last year.

In turn, the e-tailer raised Prime’s annual membership fee from $79 to $99, but still enjoyed a 53 percent spike in worldwide paid membership.

“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. The data is in and customers agree,” he said.

Amazon also recounted some of its recent introductions, including the Fire TV Stick, a $39 video-streaming dongle; Prime Now, a one- or two-hour delivery service that was launched in Manhattan and will expand to other cities this year; and Echo, a $199 voice-controlled Internet radio, wireless speaker and personal assistant.

Other highlights included a pair of Golden Globe awards for its in-house series “Transparent”; plans to produce the first TV series from Woody Allen; and the increased use of warehouse robotics, with more than 15,000 robots deployed in 10 U.S. distribution centers during the holiday season.

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