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Amazon net profit up 125% to $482 million on holiday and AWS sales

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Amazon reported a net profit of $482 million for the quarter ended December 31, 2015 (Q4 2015) showing a growth of 125% from $214 million in the same quarter last year. The company also posted revenues of $35.75 billion in the quarter, a growth of 21.88% from $29.33 billion in the same period last year. Though the company gave a lower revenue guidance of $23-26 billion for the following quarter citing weak macro-economic conditions and foreign exchange fluctuations.

Here are a few takeaways from their earnings and call with analysts:

India continues to be focus of investment

Amazon chief financial officer Brian Olsavsky said that India continues to be Amazon’s biggest investment area. “In Q4 Amazon India was the top e-commerce site in India throughout the very busy Diwali shopping season, including the shopping season, according to comScore. And sales by sellers in Q4 were greater than all of 2014 combined in Q4,” he added.

Downloads of the Amazon.in mobile shopping app grew faster in the fourth quarter than any other e-commerce app in India, according to app analytics firm App Annie. Though Amazon declined to give further details about shopping on mobile.

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In the preceding quarter, Amazon had said that it added 40,000 products per day this year and has 30 million products on it platform. Olsavsky also mentioned at the time that 90% of the sellers in Amazon India use the company’s warehouse and logistics services.

Amazon web services

Amazon Web Services (AWS), the company’s cloud computing arm, had sales of $2.405 billion, a growth of 69% when compared to the same quarter last year.

Prime memberships and video

Amazon’s prime memberships grew 51% in 2015. This was a little lower than 53% growth in 2014. Prime members typically pay $99 a year in the U.S. for unlimited two-day shipping, and music and video streaming, and unlimited photo storage.

Amazon was supposed to start video and music streaming services for Prime members in India last year, however there’s no word on it yet. The news takes prominence as Netflix officially launched India operations and would be a direct competitor for Amazon on video streaming.

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Olsavsky said that Prime members doubled the number of viewing hours on Prime Video in the quarter. Amazon invested $100 million in producing original content for Prime in the preceding quarter. “We’re very happy with the Amazon Studios content, in particular. We’ve had some great success in 2014 and 2015. As you probably know, Transparent has won multiple Golden Globes and Emmys, both for actors and for the show itself. Mozart in the Jungle just won two Golden Globe Awards,” Olsavsky added.

Robotics

Amazon disclosed some numbers regarding its robotics division and said that the company has 30,000 robots deployed which handle warehousing and packaging. Amazon acquired Kiva Systems in 2012 for $775 million.

***

Financials

Amazon reported net sales of $35.7 billion during Q4 2015, up 21.88% from $29.3 billion in Q4 2014. However, net profit was up and stood at $428 million in this quarter, compared to profit of $214 million in Q4 2014.

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Amazon’s media business revenues in North America were at $3,93 billion, up by 11% from $3.54 billion in Q4 2014. Revenues from other international regions for the media business stood at $3.29 billion down 7.56% from $3.40 billion from the same period last year. The media business includes books, music, movies, video games and consoles, software, and digital downloads.

Revenues from electronics & other merchandize business for the quarter stood at $17.33 billion in the North America region up 28% from $13.53 billion from the same quarter last year. For other international areas, the segment reported $8.49 billion, up 19% from $7.11 billion in the same period last year.

Download: Press release | Slides | Transcript

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