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| Amazon raises annual prices for Prime subscriptions |
Amazon said in its earnings report that it raised the price of its annual Prime subscription in the US from $119 to $139 a year.
The monthly subscription price has also increased from $12.99 to $14.99. The company said it's raising prices because of the benefits of extending Prime membership, such as: B. More premium video content and the expansion of free same-day delivery, as well as to offset higher labor and shipping costs in its distribution network.
The move comes as prices for just about everything — from food to energy — have soared in recent months.
Amazon's global workforce has doubled to 1.6 million in the past two years, and last year the company said it had raised wages for thousands of workers.
The company last raised Prime prices in 2018, when it raised the annual fee from $99 to $99. The latest price increase represents a 17% increase.
The change takes effect on February 18 for new basic members and after March 25 for existing members. Prime's price hike wasn't the only big news in the report.
The company's profit doubled to $14.3 billion in the December quarter, beating Wall Street analysts' expectations.
The profit jump is largely due to the company's investment in Rivian Electric Vehicles.
Amazon faces rising costs across the board
The company posted an operating loss for its North American and international e-commerce business. But AWS reported a 49% increase in operating profit to $5.3 billion.
AWS has also increased revenue more each year than any other quarter in its history. Total revenue for the quarter rose more than 9% year-over-year to $137.4 billion, slightly exceeding analysts' expectations of $137.6 billion.
Amazon shares rose 17% in after-hours trading following the report.
Despite the initial positive reaction from investors, some analysts said Amazon faces an uphill battle in the coming quarters.
The company is struggling with rising costs and people relying on online shopping after a vaccine became widely available.
The company expects net sales growth between 3% and 8% for the first quarter of 2022. This is a significant drop from the 44% increase in sales in the previous year.