Amazon Posts Record Revenue; Cost of Amazon Prime Is Rising

That pushed up net income to $14.3 billion compared with $7.2 billion a year ago. Without Rivian, net income would have slid to $2.5 billion, the company said. Revenue rose to a record $137.4 billion, just slightly under what analysts were expecting.

Amazon controls about 40 percent of the e-commerce market but that business — the one it began with and is still best known for — is increasingly the weakest part of the company. Online retail sales were essentially flat in the fourth quarter from 2020.

“Growth is slowing, there is no doubt,” Tom Johnson, global chief digital officer at Mindshare Worldwide, said in a note. “Comparisons against hyper growth quarters from early in the pandemic, supply chain issues that have a knock-on impact on ad spend, and continuing additional costs all add up the conclusion that the accelerated period of growth is over.”

AWS, Amazon’s cloud division, racked up its usual impressive performance, with operating income rising 49 percent. Ad revenue was $9 billion, up 37 percent. Twitter, which makes the vast majority of its revenue from advertising, has by comparison annual sales of less than $5 billion.

To compensate for its increased costs, Amazon said it was raising the annual price of its Prime shipping club to $139, from $119. The company said the 17 percent hike was the first Prime increase since 2018.

Article source: https://www.nytimes.com/2022/02/03/technology/amazon-earnings-prime-membership.html