Amazon.com Inc. (NASDAQ: AMZN) reported a profit near $2 billion for the fourth quarter of its fiscal year, handily beating Wall Street’s expectations. Amazon said net income rose to $1.86 billion, or $3.75 per share, in the fourth quarter ended Dec. 31. That was more than double the amount from the same period last year. According to Thomson Reuters I/B/E/S, analysts were expecting profit of $1.85 per share, on average, for the quarter.
The profit was the largest in its history. Amazon’s CFO Brian Olsavsky credited record order volume and improved warehouse efficiency for the successful quarter. The company’s bets on new services and entering new industries have made its founder, Jeff Bezos, the richest man in the world.
Amazon’s sales rose 38 percent to $60.5 billion in the quarter, also beating estimates. Its North America revenue jumped 42 percent to $37 billion, while international sales grew 29 percent to $18 billion. Revenue from subscription fees grew 49 percent to $3.2 billion. Advertising and other revenue rose 62 percent to $1.74 billion.
Amazon Web Services (AWS) continued to be the fastest-growing and most profitable business of the company. The unit posted a 45 percent rise in sales, jumping to $5.1 billion, and saw its profit margin expand from the third quarter. AWS sales accounted for a whopping 64 percent share of Amazon’s total operating income.
The online retailer drew millions of new customers to its Prime fast-shipping club for the holiday season. Prime saw more than 4 million sign-ups in one week alone last quarter. About 60 million households across the U.S. are believed to have Prime subscriptions. The company recently raised the fee for month-to-month Prime plans, affecting about 30 percent of subscribers.
Changes to U.S. tax law also added to its bottom line in the latest quarter. Its profit received a provisional $789 million boost from the U.S. tax bill passed by Republicans in December. Amazon’s stock rose more than 6 percent in extended trading. Its shares have risen almost 50 percent since the start of the fourth quarter, outpacing the S&P 500’s 12 percent rise.