Amazon profit more than doubles; shares soar

Amazon profit more than doubles; shares soar

Amazon profit more than doubles; shares soar

Amazon is raising the price of its annual Prime membership fee to US$119 (NZ$169) a year, up 20 percent from US$99 (NZ$140). The stock added to gains after executives announced an increase in the cost of the company's popular Prime subscription, to $119 a year in the USA from $99. Existing members have a little bit longer, as the new price will apply to membership renewals starting June 16.

In Bezo's recent shareholders letter, he revealed Amazon Prime now has more than 100 million subscribers.

The fee was increased to help Amazon cover rising shipping costs and to pay for video-streaming content and technology investments, said RJ Hottovy, an equity analyst at Morningstar Inc.

The change is the first time Amazon has upped the cost of an annual Prime subscription since 2014.

The company already increased the cost of a monthly Prime membership earlier this year. Earlier this year, Amazon announced it was teaming up with Berkshire Hathaway and JP Morgan Chase to create its own independent health-care company.

Third-party sellers are a beneficiary of Amazon's strong quarter.

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Elsewhere on the call, Amazon said it is expanding across industries following $130 million deal with the US NFL to stream Thursday night games.

The average estimate of financial analysts, compiled by Thomson Reuters, was for revenue of $49.87 billion and earnings of $1.27 a share.

It is the second time that the quarterly profits of the Seattle-based e-commerce and retail behemoth has topped 1 billion dollars.

The price increase is being made because "both the value of Prime and the cost to offer it have increased significantly", according to a statement from Amazon. The company's physical stores business, most of which is from Whole Foods, added $4.26 billion in revenue for the quarter.

The Prime membership program has been an important cornerstone of Amazon's flagship retail business. Now that figure is 100 million.

Cypress Semiconductor on Thursday reported first-quarter net income of $9.1 million (2 cents per share), after reporting a loss in the same period a year earlier. Amazon said net income rose to US$1.6 billion, or US$3.27 per share in the quarter ended March 31. Olsavsky added that Amazon is always working to make Prime a better, more attractive service.

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