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Summary:

Amazon’s revenues and profit were up for the first quarter of 2014. In its earnings report, the company didn’t mention the fact that it raised the price of Prime, but instead focused on everything that Prime members get.

Amazon released a fairly ho-hum Q1 2014 earnings report Thursday, slightly beating analyst estimates for revenue and profit. The retailer reported revenues of $19.74 billion, up 23 percent over this time last year, with net income of $108 million, or $0.23 per share. Operating income, a metric that analysts watch closely because they worry about Amazon’s slim margins, was down 19 percent to $146 million.

The earnings release, as is customary for Amazon, contained no previously unreported news and few hard numbers. Amazon definitely didn’t break out how many units it has sold of its new streaming TV box, the Fire TV, but CEO Jeff Bezos said in a statement that “the team is working hard to keep Fire TV in stock.”

During the quarter, Amazon raised the price of Prime to $99 per year. The release doesn’t mention that, but instead focuses on the various offerings that are now available to Prime members — including Prime Pantry, a new cheap grocery offering for Prime members that launched Wednesday; an agreement with HBO this week to stream older HBO series through Prime Instant Video; and the new Dash grocery scanner for markets with Prime Fresh grocery delivery.

Amazon also touted the fact that it’s continued to slash Amazon Web Services prices, “lowering prices for Amazon Simple Storage Service (S3) by an average of 51 percent, reducing Amazon Elastic Compute Cloud (EC2) prices by up to 40 percent and lowering Amazon Relational Database Service (RDS) prices by an average of 28 percent.”

For the second quarter of 2014, Amazon estimates that operating income will range between -$455 million and $55 million, with revenues between $18.1 and $19.8 billion.

  1. Amazon Prime Streaming is 2% of peak web traffic compared to NetFlix’s 28%. Clearly the answer to getting more people to use prime streaming is RAISING THE PRICE.

    I know you get free 2-day shipping along with that service, but I think it is badly priced. For starters — it’s yearly, not monthly. And the two services are tied together. I’d like to have a few months of Prime streaming in the summer months, when tv is a barren wasteland of reality shows, reruns, and network burn-offs. Maybe I’d like prime shipping in november- december, but it is not necessary. But I don’t want/need both services all rear round. It is a waste of my money.

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