Amazon Prime price hike begins next month

27 April, 2018, 10:11 | Author: Jeannette Greene
  • Amazon to raise Prime membership in US to $119 from $99

AWS net sales came to $5.44 billion for the quarter and delivered operating income of $1.4 billion.

The online retail giant saw its profits for the period more than double from $724m to $1.6bn. The segment's net sales grew year-over-year 49 percent. Shares climbed in after-hours trading.

Analysts on average were expecting US$1.26 per share, according to Reuters. Shares of the online retailer gained 6 percent in extended session. They did say, however, that the company plans to invest further in its own shipping services, which includes planes and on-the-ground logistics that can ship its boxes. Olsavsky added that the company had been experiencing "rises in cost" for providing some of the perks Prime offers like shorter shipping times and access to video streaming.

Amazon Prime has more than 100 million paid subscribers worldwide by Amazon's latest count. Existing members will be charged the higher price starting June 16 as their accounts become eligible for renewal, CFO Brian Olsavsky announced on Thursday (April 26).

Amazon Web Services, the company's cloud computing business, now has a $20 billion annual revenue run rate, Bezos wrote in the same letter. Overall sales rose 43 percent to $51 billion, up from $35.7 billion a year earlier.

Amazon to raise Prime membership in US to $119 from $99
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"The significant acceleration in Other revenues suggests Amazon's advertising ambitions continue to ramp quickly, and is now large enough to drive upside in Amazon's margin profile", said Baird Equity Research analyst Colin Sebastian in a note.

From 11 May, new members will pay $119 Dollars per year for a subscription, up from $99 USD right now.

Profit hit $1.6 billion, or $3.27 a share, compared with $724 million, or $1.48 a share, a year ago. It's the second straight quarter of accelerating growth for the profitable unit.

"Amazon and its consumer flywheel continue to accelerate in the market, both domestically and globally and is showing no signs of slowing down", Ives wrote.


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