Webshop giant Amazon – Jeff Bezos with 12% shares – increased its profit in the fourth quarter of last year against its expectations.
The tech group says it was able to attract more customers than ever before with Amazon Prime, a subscription that offers members all kinds of discounts and benefits. Good news for top executive Jeff Bezos, who owns 12 percent of the shares.
Operating profit rose to USD 3.9 billion in the last three months of 2019, compared with USD 3.8 billion in the same period a year earlier. Amazon was expecting a decline in this result in the fourth quarter last autumn. The net profit rose some 10 percent to 3.3 billion dollars. Because of Amazon’s share price gain, top man and founder Jeff Bezos saw his already considerable fortune increase by 13.2 billion dollars in a quarter of an hour on Thursday. He owns 12 percent of the shares.
Connoisseurs also took into account a lower profit, because Amazon had to go through a lot of pockets to keep Amazon Prime attractive. For subscribers, for example, the company introduced the advantage of free shipping of many products within one day, which cost a lot of money.
Those efforts clearly paid off. Today, 150 million people have Amazon Prime, which also provides video streaming services. That was 100 million customers in 2018. Better than expected sales figures in the vital holiday season made up for the higher costs.
Sales rose 21 percent in the past quarter to 87.4 billion dollars. The cloud services division, an important profit engine, also brought in more money, and investors were pleased with the quarterly figures.
In the so-called aftermarket, Amazon’s share shot up more than 12 percent. For the current quarter, Amazon anticipates a decline in profits, on top of an increase in turnover.