Amazon bounces back and beats expectations

Guy Bentley
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Amazon has reported its fourth quarter earnings and beate analysts' expectations by a handsome margin.

Revenue rose 15 per cent to $29.3bn Amazon was forecast to report sales of $29.67bn, 16 per cent up year-on-year. However, earnings per share obliterated forecasts came in at 45 cents rather then the expected 18 cents.

Operating expenses rose 15 per cent to $29.3bn. For the first quarter of this year revenue is expected to grow between six and 16 per cent.

Investors were hoping the e-commerce giant perform better than the previous two-quarters where it had reported negative earnings. Amazon was expected to report a better performance after resolving its quarrel with Hachette over the pricing of e-books.

Net sales for the year climbed 20 per cent over the whole year to $88.99bn. Net losses for the year amounted to $241m compared to $274m the previous year. Amazon said sales growth would have reached 18 per cent if it weren't for foreign exchange fluctuations.

Amazon Prime and the Amazon App Store were also seen as sources of optimism. Amazon Prime subscribers soared by 53 per cent.

Amazon's chief executive Jeff Bezos said:

When we raised the price of Prime membership last year, we were confident that customers would continue to find it the best bargain in the history of shopping. The data is in and customers agree — on a base of tens of millions, worldwide paid membership grew 53 per cent last year — 50 per cent in the U.S. and even a bit faster outside the U.S.

In the wake of the third-quarter results, Amazon's share price dropped eight per cent. Poor margins on the Amazon Fire hit the company hard.

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