Amazon reports thin profits for busy Christmas period

Amazon has reported modest holiday profits, but a 15% rise in sales in Q4 2014 has cheered investors.

The online retail giant made a net profit of $214 million for the last three months of 2014, which is a drop of $25 million on the same period in 2013.

However, it was an improvement on the previous quarter, in which Amazon made a net loss of $437 million.

Amazon shares rose by nearly 8% in after-hours trading.

But despite net sales of $89 billion, Amazon made a loss of $241 million for 2014 as a whole.

The company also warned that its finances were “inherently unpredictable”.

It sounded a note of caution for the next few months, saying it could make an operating loss of up to $450 million.

Amazon added that profits 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”.

The web giant has become notorious for its lackluster earnings, and has tended to focus on expanding its business rather than increasing its profitability.

True to form, Amazon’s boss, Jeff Bezos, emphasized the success of a new service in the company’s results, rather than addressing the company’s figures.

He referred to Amazon’s membership scheme, Amazon Prime, as a “one-of-a-kind, all-you-can-eat, physical-digital hybrid”, adding that its user base grew by 53% last year.

However, other recent projects have not been quite as successful.

Amazon’s foray into the smartphone market, with the shopping-focused Fire phone, has hardly been a bestseller, and there have been reports that the tech firm is winding up its mobile payments service.

Most recently, it was forced to shut down its entry into the nappy market just six weeks after launching the initiative.