(MENAFN- ProactiveInvestors) () the online commerce giant posted stronger-than-estimated earnings in the fourth quarter as revenue grew amid robust North American sales and decelerated expenses. Shares surged.
Net income totalled $214 million or $0.45 per share in the October-to-December quarter down from $239 million or $0.51 per share a year earlier the Seattle Washington-based company said in a statement late yesterday.
That result trounced market expectations of $0.17 per share in profit.
Sales rose 15 percent to $29.3 billion compared with the analyst-consensus forecast of $29.7 billion.
By geography sales leapt 22 percent in North America to $18.7 billion compared to 3 percent to $10.6 billion for everywhere else.
Gross margin or Amazon’s profits not including the cost of sales rose to 29.5 percent from 26.5 percent in the year-earlier period.
Fourth-quarter operating expenses of $28.7 billion were up 14 percent slowing down from the full-year growth pace of 20 percent.
Shares soared 13 percent to $351.80 at 8:53 a.m. in New York premarket.
In a conference call with reporters chief financial officer Tom Szkutak said Amazon is putting "a lot more energy around making sure we get great productivity around our various fixed and variable assets."
The company said yesterday that Amazon Prime its $99 annual membership program boosted its world-wide paid membership by 53 percent last year— 50 percent in the U.S. and at a slightly faster rate internationally. Szkutak declined to give specific numbers but analysts estimate that there are around 40 million Prime members world-wide the Wall Street reported.
“When a customer becomes a Prime member they do step up their purchases very considerably” he said. By some estimates Prime members spend as much as three times what non-Prime members do.
Prime is the key to Amazon’s attempt to build an ecosystem where people use Amazon devices to watch Amazon-produced content that is surrounded by ads for Amazon products that are delivered by Amazon’s fleet of drones.
The company said it would start breaking out numbers for its cloud computing platform AWS after the current quarter. AWS is growing much faster than Amazon as a whole although price wars with other leading players are presumably cutting into profitability. Revenue in the “other” category which is dominated by AWS was $1.74 billion in the fourth quarter up 41 percent.
Looking ahead Amazon guided for first-quarter sales of $20.9 billion to $22.9 billion up 6 percent to 16 percent from the year-earlier period compared with the $23.05 billion projected by analysts polled by Capital IQ.
The company warned that the current quarter’s operating income will at best drop to $50 million and could swing to a loss of as much as $450 million.
According to the research firm eMarketer worldwide e-commerce totalled $1.3 trillion in 2014 up 22.2 percent from 2013. Amazon accounts for slightly over 5 percent of that — a remarkable achievement for one company but much less than its dreams.
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