A busy holiday period helped Amazon to record sales last quarter as its cloud services and advertising arms become increasingly profitable. 

The gains, outlaid in the latest quarterly results, helped offset increasing shipping costs as the ecommerce giant strives for same day Prime delivery in the US.

Amazon shares rose nearly 10 per cent following the news, adding billions in value and pushing its market cap above $US 1 trillion.

Amazon made $US87 billion worth of sales in the three months ending December 31 2019, a 21 per cent increase on the corresponding 2018 period. Fourth quarter revenue rose to a record $US87.4 billion helping deliver $US 3.3 billion in profit, a year on year increase of 8 per cent.

Advertising services, one of the company’s new cash cows, grew 41 per cent in Q4, generating Amazon $US4.8 billion in sales.

Revenue for Amazon’s cloud computing service, Amazon Web Services, increased 34 per cent to $US 10 billion in the quarter, and now accounts for more than 10 per cent of the company’s total revenue. 

Prime pump

Amazon revealed the number of customers paying for its Prime subscription service has risen to more than 150 million worldwide. 

“We’ve made Prime delivery faster — the number of items delivered to U.S. customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year,” said Amazon CEO Jeff Bezos.

“Members now have free two-hour grocery delivery from Amazon Fresh and Whole Foods Market in more than 2,000 U.S. cities and towns.”

The ecommerce giant is currently focused on bringing its standard shipping time for Prime eligible products down to one day or less, making more investments in logistics and contracting out some deliveries to an Uber like service.

The latest financials show world wide shipping costs ramped up in the last year with a 43 per cent year on year increase in the last quarter.

Amazon also increased its employees to help with the logistics demands. In addition to many contractors, the company employees nearly 800,000 people full time.

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