Amazon trounces expectations with big quarter

NEW YORK – Amazon’s profits in the fourth quarter nearly doubled, beating analysts’ expectations, even as the online behemoth continues to contend with surging costs tied to a snarled supply chain and labor shortages.

The company, based in Seattle, also raised its annual prime membership fee Thursday to $139 per year from $119.

This is the first time Amazon has raised the price of Prime membership since 2018.

Shares of Amazon spiked nearly 17% in after market trading.

“As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to omicron,” said Amazon CEO Andrew Jassy, who succeeded founder Jeff Bezos in that role last July.

“Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic.”

Bezos is now executive chairman.

Amazon was one of the few retailers that has prospered during the COVID-19 outbreak: As physical stores selling nonessential goods temporarily or permanently closed, homebound people turned to Amazon for everything from groceries to cleaning supplies.

But growth has slowed as newly vaccinated Americans feel comfortable going out.

And the company, like many others, are dealing with global supply chain issues and shortages of workers.

Amazon’s chief financial officer Brian Olsavsky estimated Amazon incurred about $4 billion in costs related to supply chain issues and labor issues.

And he said that the surging omicron variant resulted in workers calling out sick, hurting productivity.

Ford posts nearly $18B in profits for 2021

DETROIT – Ford Motor Co. reversed a loss and rode some big accounting changes to post a $17.94 billion net profit last year, even as it battled computer chip shortages that caused factory slowdowns and vehicle shortages.

U.S. sales for the Dearborn, Michigan, automaker fell 7% for the year over depressed 2020 numbers.

But customers paid record prices of nearly $51,000 per vehicle in Ford’s most lucrative market, according to Edmunds.com.

Excluding the one-time items such as the $8.2 billion re-classification of Ford’s investment in electric vehicle startup Rivian, the company made $1.59 per share, falling short of analyst estimates of $1.86, according to FactSet.

Revenue rose 7.2% to $136.34 billion. That was short of analyst estimates of $137.61 billion.

The company said it expects full-year pretax profits this year to rise 15% to 25% over 2021 numbers, to a range of $11.5 billion to $12.5 billion.

Chief Financial Officer John Lawler said Ford is seeing high demand for its products, but its factory output was constrained last year by the semiconductor chip shortage and other supply-chain disruptions.

“It’s the supply chains that limit what we could produce, what we could provide,” he told reporters Thursday.

But Lawler warned Ford faced increased commodity costs for materials such as aluminum, steel, precious metals and resins.

Those costs increased $3 billion last year, and Ford sees them rising another $1.5 billion to $2 billion this year.

“That is one of our key headwinds that we’re working through,” he said. “It’s pretty much across the board on all of our commodities.”

From wire reports