Amazon.com reported profit for the holiday quarter that topped analysts’ estimates, shrugging off the effects of heavy spending on fast delivery and original video programming to attract customers.
The online retailer on Thursday posted a fourth-quarter profit of $214 million, or 45 cents a share. Analysts on average had projected profit of 18 cents a share, according to data compiled by Bloomberg. Revenue was $29.3 billion, slightly below the average analysts’ estimate of $29.7 billion.
The results boosted Amazon following two consecutive periods of losses that incited questions about Chief Executive Officer Jeff Bezos’s methods of spending big and counting on sales growth to make up for minuscule profit. While the Seattle company ended 2014 with its first annual loss in at least 12 years, the profit last quarter helped blunt the decline.
“This means they are listening to investors,” said Michael Pachter, an analyst at Wedbush Securities Inc. in Los Angeles.
Shares surged as much as 9 percent in extended trading after earlier closing at $311.78 in New York. The stock fell 22 percent last year, compared with an 11 percent gain in the Standard &Poor’s 500 Index.
Net income declined 12 percent from $239 million a year earlier while sales rose 15 percent from $25.6 billion, the company said. Operating expenses climbed 15 percent to $28.7 billion, which was a slower rate of increase than the 20 percent jump a year earlier.
Excluding a $895 million hit from foreign exchange rates, net sales increased 18 percent from a year ago, the company said.
Amazon also forecast first-quarter sales of $20.9 billion to $22.9 billion, falling short of analysts’ average projection of $23 billion.
“It felt like Amazon had a great holiday because they started early and they carried strong through,” said Scot Wingo, CEO of ChannelAdvisor, which helps third-party merchants sell on Amazon.
Amazon has long invested heavily to tie people to the e-commerce website. Most recently, the company built new warehouses and sorting centers to speed delivery times, unveiled interactive speaker Echo and pushed deeper into corporate technology with an e-mail and calendar service for professionals dubbed WorkMail.
To help fuel spending, Amazon obtained a $2 billion credit line with Bank of America Corp. in September and last month sold $6 billion in debt in its biggest bond offering.
Bezos said the spending has paid off by attracting more members to Amazon’s Prime fast-shipping program.
“The data is in and customers agree — on a base of tens of millions, worldwide paid membership grew 53 percent last year — 50 percent in the U.S. and even a bit faster outside the U.S.,” he said.
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