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11/21/2024 03:16:55 pm

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Amazon Posts US$214 Million Profit, Stock Soars

CEO Jeff Bezos

(Photo : Reuters) Amazon did well in 2014.

Amazon has announced a net profit of US$214 million after two months of straight operating losses, bringing new life into Amazon's stock that gained 12 percent.

CEO Jeff Bezos couldn't promise a profit in the next quarter, however, due to new spending on data and fulfillment centers, plus investments in enterprise and original programming.

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The net profit couldn't stop Amazon from reporting its first annual loss in 12 years, making some investors nervous that high investments might not pay off in the long-term. Amazon lost nearly US$1 billion in the last two quarters due to the Fire Phone failure and large investments in fulfillment centers.

Amazon's chief financial officer Tom Szkutak also confirmed Amazon Web Services will be split into a separate category in 2015, removing it from the 'North America, Other' classification in the company's financial report.

The split will give first insight into how Amazon's enterprise platform is performing, which currently powers Netflix, Adobe and a few other online services. Investors have been asking for this for a while since it will show how dominant AWS is compared to Microsoft Azure and IBM.

Amazon's investment in fulfillment centers will reportedly help the growing interest in prime, up 53 percent from last year. The US$99 shipment service (with other Amazon services) has over 10 million subscribers.

These subscribers are more likely to use Amazon for shopping, according to the financial report.

Amazon has also invested in 12 original films for 2015; focused on beefing-up the library for its movie streaming service, Instant Video, and competing against Netflix and Hulu Plus.

Large tech companies are all focused on more investment throughout 2015, Google, Alibaba and Facebook are expected to acquire talent, companies and patents.

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