Amazon posts largest profit in company history

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Amazon.com reported a profit of near 2 billion US dollars on Thursday, the largest in its history, as the online retailer drew millions of new customers to its Prime fast-shipping club for the holiday season and as changes to US tax law added to its bottom line.

Shares rose more than 6 percent in extended trading, after previously closing down 4 percent on the Nasdaq.

The world's largest online retailer said net income more than doubled to 1.86 billion US dollars in the fourth quarter.

Its profit received a provisional 789 million US dollar boost from the US Republican tax bill passed in December.

“This was another blow-out quarter for Amazon,” said GBH Insights analyst Daniel Ives. “The retail strength was eye-popping as the company had a banner holiday season and looked to capture roughly 50 percent of all e-commerce holiday season sales.”

The company’s fast delivery, like its two-hour Prime Now service, has helped win over holiday shoppers eager to avoid the crowds of big box retailers. Prime saw more than 4 million sign-ups in one week alone last quarter, and revenue from subscription fees grew 49 percent to 3.2 billion US dollars, Amazon said.

Reuters Photo.‍

Perhaps the surprise star of the past quarter was Amazon’s voice aide Alexa, which is embedded in the company’s Echo speakers and Fire TV players, as well as some cars and house gadgets. Millions of Amazon customers ordered goods by voice with Alexa in the past year, said Olsavsky on a separate call with reporters.

“Our 2017 projections for Alexa were very optimistic, and we far exceeded them,” added Jeff Bezos, Amazon’s founder and chief executive, in a statement. “We don’t see positive surprises of this magnitude very often — expect us to double down.”

The company has become notorious for running on a low profit margin, yet its big bets on new services and entry into new industries have reaped rewards for shareholders over the past decade, including its founder Bezos, now the richest man in the world.

And earlier this week, it announced a partnership with JPMorgan Chase & Co and Berkshire Hathaway Inc to determine how to cut health costs for hundreds of thousands of their employees.

Source(s): Reuters