NEW YORK: Amazon.com Inc on Thursday reported a profit near $2 billion, the largest in its history, as the online retailer drew millions of new customers to its Prime fast-shipping club for the holiday season and as changes to US tax law added to its bottom line.

Shares rose more than 6 per cent in extended trading, after previously closing down 4pc on the Nasdaq.

Seattle-based Amazon is using fast shipping, television shows exclusive to its website and forays into new technology, such as its voice-controlled Alexa devices, to attract high-spending Prime members. Amazon said price cuts at Whole Foods Market, which it acquired for $13.7bn last year, are helping it win grocery sales, too.

The world’s largest online retailer said net income more than doubled to $1.86bn, or $3.75 per share in the fourth quarter ended Dec 31.

Its profit received a provisional $789m boost from the US Republican tax bill passed in December.

Analysts on average were expecting just $1.85 per share, according to Thomson Reuters.

“This was another blow-out quarter for Amazon,” said GBH Insights analyst Daniel Ives. “The retail strength was eye-popping as the company had a banner holiday season and looked to capture roughly 50pc of all e-commerce holiday season sales.”

As expected, the period running from before the US Thanksgiving holiday through New Years was Amazon’s biggest-ever by revenue.

Sales rose 38pc to $60.5bn in the quarter, beating estimates.

The company’s fast delivery, like its two-hour Prime Now service, has helped win over holiday shoppers eager to avoid the crowds of big box retailers.

Prime saw more than 4 million sign-ups in one week alone last quarter, and revenue from subscription fees grew 49pc to $3.2bn, Amazon said.

That figure is expected to rise this quarter in part because the company recently raised the fee for month-to-month Prime plans, affecting some 30pc of subscribers, according to analysts at Cowen & Co. Some 60m, or close to half of all US households, are estimated to have Prime subscriptions.

Published in Dawn, February 3rd, 2018