Amazon rewards Investors with better than expected profit

Amazon rewards Investors with better than expected profit

On Thursday, Amazon reported a $214-million profit or 45 cents a share, on revenue of $29.33 billion, beyond the estimate of many analysts for the holiday season. Market analysts had estimated just 17 cents a share on $29.68 billion in revenue.

CEO Jeff Bezos said that in the quarter, the company has got more than 50% boost in the Prime membership. The company has not released the exact numbers for Prime memberships.

It seems like Amazon has learnt a lesson from the mistakes it has made in 2013. Last year, some shipments reached the doorsteps of customers after Christmas. This happened due to the backlog of packages by Amazon's delivery partners FedEx and UPS.

After two consecutive quarters of losses, the company has finally managed a profit. This profit has highly influenced the investors. The stock closed at $311.78, up $7.87, or more than 2%.

In the ongoing quarter, the company is expecting a 10% growth in the sales. The increased sales will be between $20.9 billion and $22.9 billion.

In 2013, Amazon has reported $146 million in operating income and it has forecasted that the range for the operating income in the current quarter could range from a loss of $450 million to a profit of $50 million.

Scot Wingo, CEO of Channel Advisor, said that the largest online retailer of the world changed its delivery plans in 2014. Christmas delivery cut off dates were also extended by them.

"They did a really good job of extending the holidays and not repeating the debacle of last year", Wingo said.

Prime is an important component of Amazon's strategy. According to a study done in the fourth quarter of 2014, Prime customers have spend much more on Amazon as compared to the Non-Prime shoppers.


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