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Amazon profit jumps while revenue misses mark
[SAN FRANCISCO] Amazon reported on Thursday that profit in the final three months of last year leapt, but saw shares sink as revenue for the tech giant fell shy of expectations.
Net income for the quarter was US$749 million, compared with US$482 million in the same period a year earlier, according to earnings figures.
While revenue rose to US$43.7 billion from US$35.7 billion in a similar year-over-year comparison, Wall Street had expected Amazon to take in more cash during the key holiday shopping season.
Amazon shares were down more than four per cent to US$804.75 in after-market trades that followed release of the earnings report.
While Amazon is known for its huge online retail operations, it is also a major provider of cloud computing, and is a rival to Netflix in streaming video. It has been ramping up efforts in artificial intelligence with its Alexa-powered speakers and partnerships with makers of connected devices.
Amazon founder and chief executive Jeff Bezos said the company is looking for growth with its "Prime" subscription service which gives customers access to video, music and other services and preferred shipping.
""Our Prime team's customer obsession kept them busy in 2016," Mr Bezos said in a statement.
"Prime members can now choose from over 50 million items with free two-day shipping... Prime Video is now available in more than 200 countries and territories."
The earnings report said the cloud unit known as Amazon Web Services saw revenue jump 47 per cent in the quarter to US$3.5 billion.
Its retail operations took in US$26 billion in North America and US$14 billion in the rest of the world.
Amazon Web Services and rival Microsoft Azure will be the "only two super clouds" where businesses rent storage or computing power for online operations, but that value is already built into the share price, Global Equities Research analyst Chip Chowdhry said in a note to investors.
Devices infused with Alexa artificial intelligence were top selling products at Amazon.com during the holiday season, according to the company.
Sales of Echo home virtual assistant devices built with the machine smarts inside were nine times higher that they were during the same quarter a year earlier, Amazon said.
Alexa was as one of the big winners at this year's Consumer Electronics Show, cropping up in TVs, cars, fridges - you name it - in what appeared to be a breakthrough moment for the smart technology Amazon continues to invest in the retail network at the company's core.
This week Amazon announced plans to strengthen its distribution muscle, and create US jobs, by building its first air freight hub, an investment of nearly US$1.5 billion.
A hub for the company's growing fleet of Prime Air cargo planes will be built at an airport in northern Kentucky, adding more than 2,000 workers to the approximately 10,000 people it already employs at fulfillment centres in that state.