NEW YORK – Amazon’s profits in the fourth quarter nearly doubled, beating analysts’ expectations, even as the online behemoth continues to contend with surging costs tied to a snarled supply chain and labor shortages.
The company, based in Seattle, also raised its annual prime membership fee on Thursday to $139 per year from $119. This is the first time Amazon has raised the price of Prime membership since 2018.
Shares of Amazon spiked nearly 17% in after market trading.
“As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to omicron,” said Amazon CEO Andrew Jassy, who succeeded founder Jeff Bezos in that role last July.
“Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic,” he added according to AP.
Bezos is now executive chairman.
Amazon was one of the few retailers that has prospered during the COVID-19 outbreak: As physical stores selling non-essential goods temporarily or permanently closed, homebound people turned to Amazon for everything from groceries to cleaning supplies.
But growth has slowed as newly vaccinated Americans feel comfortable going out. And the company, like many others, is dealing with global supply chain issues and shortages of workers.
Amazon’s chief financial officer Brian Olsavsky estimated Amazon incurred about $4 billion in costs related to supply chain issues and labor issues. And he said that the surging omicron variant resulted in workers calling out sick, hurting productivity.
Still, the company reported a profit of $14.32 billion, or $27.75 per share, for the three-month period ended Dec. 31, 2021. That compared with a profit of $7.22 billion, or $14.09 per share, during the year-ago period. Revenue rose 9% to $137.41 billion, the company´s fifth consecutive quarter of revenue topping $100 billion.
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