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Amazon

Amazon misses earnings, Prime price hike coming?

By
JP Mangalindan
JP Mangalindan
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By
JP Mangalindan
JP Mangalindan
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January 30, 2014, 10:50 PM ET
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FORTUNE — Despite another quarter of solid sales growth for Amazon (AMZN), the Seattle-based e-commerce goliath saw its stock slide over 8% in after-hours trading.

For the fourth quarter of 2013, profits grew to $239 million, or 51 cents per share, from $97 million the same period before. Revenues climbed 26% year over year to $25.6 million. Profits in particular missed Wall Street’s projections of 71 cents per share. Revenue growth also slowed slightly during the fourth quarter, a period that includes the all-important holiday shopping season.

In a press release, the company announced a “record-setting” holiday season for Amazon Prime, the company’s popular $79 annual membership. In keeping with tradition however, it did not disclose numbers. (Prime was so popular, the company claimed it occasionally limited the number of membership signups in December.)

MORE: eBay CEO – Icahn’s call for PayPal spin-off is old news

Prime’s pros did little to soften the news disclosed during Thursday’s earnings call that Amazon was mulling over increasing the price of Prime in the U.S. by $20 to $40 — a bump that could affect millions of existing Prime members. The culprit? Increasing fuel and shipping costs.

As CFO Tom Szkutak pointed out, this is the first time in Prime’s nine years that Amazon has considered increasing prices. He also emphasized Prime’s growing value, referencing features like the Kindle e-book Loaning Library, and the increase of its movie and TV streaming catalog from 33,000 to 40,000 movies last year. “Member are ordering more items across more categories than ever before,” said Szkutak, although again, he declined to give specifics.

In the press release, CEO Jeff Bezos made no reference to the Prime price hike, opting to focus on Amazon’s excellent customer service instead. “You can now read your Kindle gate-to-gate, get instant on-device tech support via our revolutionary Mayday button, and have packages delivered to your door even on Sundays,” he said. “In just the last weeks, Forrester, YouGov, and ForeSee have all ranked Amazon #1 — and we believe we’re just scratching the surface of what world-class customer service can be.”

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