Amazon to increase Prime membership amid strong Q4 results
Amazon.com shared financial results for 2021, and for its fourth quarter, which ended Dec. 31, 2021.
Net sales increased 9% to $137.4 billion in the fourth quarter, compared with $125.6 billion in the same period in the prior year. The company said that excluding the $1.3 billion unfavorable impacts from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 10% compared with fourth-quarter 2020.
Operating income decreased to $3.5 billion in the fourth quarter, compared with $6.9 billion in the fourth quarter of 2020.
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Also shared by the company was with the continued expansion of Prime member benefits as well as the rise in wages and transportation costs, Amazon will increase the price of a Prime membership in the U.S., with the monthly fee going from $12.99 to $14.99, and the annual membership from $119 to $139.
Net income increased to $14.3 billion in the fourth quarter, or $27.75 per diluted share, compared with $7.2 billion, or $14.09 per diluted share, in the fourth quarter of 2020.
The company said that fourth-quarter 2021 net income includes a pre-tax valuation gain of $11.8 billion included in non-operating income from its common stock investment in Rivian Automotive, which completed an initial public offering in November.
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“A big thank you to employees across Amazon who overcame another quarter of COVID-related challenges and delivered for customers this holiday season. Given the extraordinary growth we saw in 2020 when customers predominantly stayed home, and the fact that we’ve continued to grow on top of that in 2021, our Retail teammates have effectively operated in peak mode for almost two years. It’s been a tremendous effort, and I’m appreciative and proud of how hard our teams have worked to serve customers,” said Andy Jassy, Amazon CEO.
In addition, the company also reported full-year 2021 results, which include net sales increased 22% to $469.8 billion, compared with $386.1 billion in 2020. Excluding the $3.8 billion favorable impacts from year-over-year changes in foreign exchange rates throughout the year, net sales increased 21% compared with 2020.
Operating income increased to $24.9 billion, compared with operating income of $22.9 billion in 2020. Net income increased $33.4 billion, or $64.81 per diluted share, compared with net income of $21.3 billion, or $41.83 per diluted share, in 2020.
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“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. Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic. When you combine how we’re staffing and scaling our fulfillment network to bring even faster delivery to more customers, the extraordinary growth of AWS with 40% year-over-year growth (and now a $71 billion revenue run rate), the addition of marquee new entertainment like The Lord of the Rings: The Rings of Power and Thursday Night Football, and a plethora of new capabilities that we’re building in areas like Alexa, Ring, Grocery, Pharmacy, Amazon Care, Kuiper, and Zoox, there’s a lot to look forward to in the months and years ahead,” Jassy said.