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Amazon reports better-than-expected profits and big growth for its Prime service

Amazon reports better-than-expected profits and big growth for its Prime service


Shares soared on a better-than-expected earnings report

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Amazon has always been good at generating massive revenue. What the company has struggled with is generating a consistent profit. Today the company announced its fourth quarter results, reporting net income of just $241 million on its $29.33 billion in sales.

Even that small profit, however, was enough to please investors, who were expecting a number one-third of that size. It's the first time in a year and a half that the company bested analysts' expectations, and Amazon shares surged in after hours trading, up around 8 percent.

Even a small profit was enough to please investors

The company also shared some data around its Prime service, of which it raised the price last year. CEO Jeff Bezos offered up some fuzzy math, stating that, "On a base of tens of millions, worldwide paid membership grew 53 percent last year — 50 percent in the US and even a bit faster outside the US."

Amazon plans to spend heavily on Prime

That means it's safe to say Prime had at least 10 million users to start 2014 and has added at least 5.3 million since. Bezos emphasized the company will continue to spend heavily on what it believes is the lynchpin of its ecosystem. "Prime is a one-of-a-kind, all-you-can-eat, physical-digital hybrid — in 2014 alone we paid billions of dollars for Prime shipping and invested $1.3 billion in Prime Instant Video."

In its letter to investors, Amazon highlighted its recent win at the Golden Globes, its Fire TV stick, and its newest device, the Echo. Notably absent was any mention of its tablets or Fire phone, which reportedly sold quite poorly. Instead, Amazon hopes investors can get excited about the first television series from Woody Allen.