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Amazon Q4 Earnings Soar

Updated Seattle – reported a 146.4 percent spike in its fourth-quarter net income, to $239 million, and a full-year profit of $274 million following the prior year’s $39 million loss.

But despite the return to profitability, the e-tailer’s shares sank in after-hour trading as earnings fell short of forecasts and off-shore sales growth slowed.

And on its earnings call, chief financial officer Tom Szkutak said the company may increase Prime’s $79 annual membership fee by $20 to $40 in the U.S. due to rising shipping and transportation costs, and greater usage by members. The program has not had an increase since its launch nine years ago, he said, and Amazon hasn’t determined when or how it would implement the price hike.

Still Amazon’s sales and profitability numbers were impressive for the quarter and year. Net sales for the three months, ended Dec. 31, rose 20 percent to $25.6 billion, comprised of $21 billion in product sales and $4.5 billion in services. Sales would have increased 22 percent without the impact of unfavorable currency fluctuations, the e-tailer said.

Full-year sales rose 22 percent to $74.5 billion.

In North America, net sales rose 26 percent to $15.3 billion, and operating income increased 19 percent to $725 million. Sales of the catch-all “CE and other general merchandise” category rocketed 25 percent in North America to $10.6 billion, and sales of media rose 21 percent to $3.5 billion.

“It’s a good time to be an Amazon customer,” founder and CEO Jeff Bezos said in a statement, citing Sunday deliveries, instant on-device Kindle tech support, unrestricted Kindle use on more than 20 airlines, and top rankings from Forrester and ForeSee.

“We believe we’re just scratching the surface of what world-class customer service can be,” he said.

Amazon said it enjoyed a record holiday season for its Amazon Prime program during the quarter, and was forced to limit new memberships during peak periods in December.

The e-tailer said it is “working hard” to increase capacity for the program, which provides two-day shipping for millions of products, and access to printed and streaming content, at no additional cost.

During the quarter Amazon upped its expenditures for fulfillment, technology and content, and announced that it is working with top CE firms, movie studios and TV programmers, including Samsung, Warner Bros., Lionsgate, 20th Century Fox and Discovery, to provide streaming 4K Ultra HD content.

In addition, its Amazon Studios unit said it plans to shoot all full original series, including comedies and dramas, in 4K Ultra HD this year.