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Amazon reports modest earnings, but gets share price boost

The American e-commerce giant Amazon has reported modest profits during the Christmas period, but has also said it's an improvement on the previous quarter, which saw the company’s shares rise.

The company's net income was $214 million (£142 million) for the last three months of 2014, which is 25 million less than the same period a year before, when Amazon made $239 million (£158 million).

But compared to the previous quarter, in which Amazon made a net loss of $437 million (£289 million), it’s a drastic improvement which also saw the company’s shares rise eight per cent.

Amazon’s net sales increased 20 per cent to $88.99 billion (£59 billion), compared with $74.45 billion (£49.4 billion) in 2013.

Despite all that, the company reported a $241 million (€159 million) loss in 2013 as a whole, and added that its finances were “inherently unpredictable”.

“Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce,” says Amazon.

Even though the company’s figures show modest earnings, Amazon’s boss Jeff Bezos shifted his focus to the new service, Amazon Prime, which has enjoyed a membership growth of late.

“When we raised the price of Prime membership last year, we were confident that customers would continue to find it the best bargain in the history of shopping.

"The data is in and customers agree - on a base of tens of millions, worldwide paid membership grew 53 per cent last year - 50 per cent in the U.S. and even a bit faster outside the U.S.,” said Bezos.

“Prime is a one-of-a-kind, all-you-can-eat, physical-digital hybrid - in 2014 alone we paid billions of dollars for Prime shipping and invested $1.3 billion (£860 million) in Prime Instant Video. We’ll continue to work hard for our Prime members.”