Tech

Amazon Raises Cost Of Prime Membership Following Strong Q4 Earnings

The e-commerce company is raising the price of its Prime membership for the first time in four years — from $119 to $139 per year.

Amazon Raises Cost Of Prime Membership Following Strong Q4 Earnings
Kathy Willens / AP
SMS

Amazon reported Thursday that its profits nearly doubled in the final three months of last year, even as it contended with surging costs tied to a snarled supply chain and labor shortages.

The Seattle-based online behemoth also said it is raising its annual prime membership fee in the U.S. to $139 per year from $119. It's the first price hike for the Prime membership since 2018.

Shares of Amazon jumped nearly 15% in after-market trading.

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Amazon is 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.

Amazon's Chief Financial Officer Brian Olsavsky estimated Amazon incurred about $4 billion in costs related to supply-chain 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. 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.

Amazon said that its sales are expected to be between $112 billion and $117 billion for the current quarter.

Additional reporting by The Associated Press.