Amazon's Profit Drops Less Than Expected -- Update

By Maria Armental 

Amazon.com Inc. said its fourth-quarter profit declined less than expected and sales surged 15%, though the e-commerce giant's spending continued to weigh on its bottom line.

Shares climbed more than 7% after hours even as the company gave a somewhat disappointing sales forecast for the current quarter.

Amazon guided for sales of $20.9 billion to $22.9 billion, up 6% to 16% from the year-earlier period, compared with the $23.05 billion projected by analysts polled by Thomson Reuters.

Launched in Seattle in 1995, Amazon has expanded through acquisitions and new ventures, from groceries to its own line of everyday household products, media offerings and web services. On Wednesday, Amazon said it would launch an email and electronic calendar service, venturing into a crowded field that pits it against the likes of Microsoft Corp. and Google Inc.

The company said Thursday that Amazon Prime, its annual membership program, saw its worldwide paid membership grow 53% last year--50% in the U.S. and at a slightly faster rate internationally.

Amazon has been aggressively bulking up the program, adding content to its unlimited streaming services and a series of products available only to members who pay the $99 annual fee and rolling out a one-hour bike messenger delivery service in Manhattan. The company, however, hasn't released membership numbers.

Late last year, Amazon said more than 10 million customers used Prime unlimited shipping service for the first time during the holiday season, but that figure could include customers taking advantage of its 30-day free trial.

For the latest period, Amazon reported net income of $214 million, or 45 cents a share, down from $239 million, or 51 cents a share, a year earlier.

Analysts surveyed by Thomson Reuters were expecting a profit of 17 cents a share.

Sales rose to $29.33 billion. Adjusting for the impact of currency exchange rates, sales rose 18%. Amazon had projected $27.3 billion to $30.3 billion.

Operating expenses rose to $28.7 billion from $25.1 billion.

Through Thursday's close, the company's stock has fallen 19% over the past 12 months.

--Greg Bensinger contributed to this article.

Write to Maria Armental at [e-mail]

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