Amazon makes a decent Q4 profit thanks to Prime boost

Amazon has announced surprisingly healthy profits for Q4, thanks largely to a major increase in Prime subscriptions.

The online retail giant brought in $29.33 billion (£19.5 billion) in sales over the lucrative Christmas period, which in itself represents a 15 percent increase over the same period in 2013.

Its net income was a considerably less spectacular $241 million (£160 million), but that’s usually how things tend to go for Amazon. The company is renowned for ploughing vast amounts of money back into the business, often leading to periods of loss immediately following on from periods of profit.

In 2014 alone, the company ploughed $1.3 billion into Prime Instant Video – the service’s Netflix-rivalling video streaming component.

Still, even the relatively small profit Amazon has made in Q4 is better than many analysts expected.

One of the reasons for that could be the performance of the Amazon Prime subscription service. Amazon CEO Jeff Bezos has revealed that Prime’s worldwide membership grew by 53 percent over the course of 2014.

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Needless to say, Bezos has promised to invest even more money into this “a one-of-a-kind, all-you-can-eat, physical-digital hybrid.”

As mentioned before, Amazon tends to follow profit-making quarters with heavy investment, and so it will prove in Q1 of 2015. The company has forecast that it could lose as much as $450 million (£299 million) in the next quarter.

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