Amazon soars after announcing Prime price hike, topping operating income expectations

Amazon (NASDAQ:AMZN) soared in after-hours trading smashing operating income and EPS expectations with its Q4 report and announcing a new price hike for the Prime annual membership to $139. The price hike will go into effect on March 25.

Total revenue in North America in Q4 was $75.4B vs. $82.4B a year ago, while international revenue was $37.5B vs. $37.7M a year ago.

AWS revenue came in at $17.78B vs. $17.23B consensus and $17.8B a year ago.

Operating income was reported at $3.5B vs. $6.9B a year ago and $2.4B consensus. Operating margin was 2.5% of sales vs. 5.5% a year ago and 1.8% consensus. The company's net income tally included a pre-tax valuation gain of $11.8B in non-operating income from investment in Rivian Automotive.

Free cash flow decreased to an outflow of $9.1B for the trailing twelve months, compared an inflow of $412.0B for the trailing twelve months a year ago.

"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. Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic," said CEO Andy Jassy.

Looking ahead, Amazon expects Q1 revenue of $112B to $117B vs. $121B consensus and operating income of $3.0B to $6.0B vs. $6.35B consensus.

The Amazon (AMZN) conference call is set for 5:30 p.m.

Shares of Amazon (AMZN) gained 13.16% in after-hours trading to land at $3,143,85. AMZN was down 7.6% during the regular session.

Late yesterday, Amazon (AMZN) confirmed stakes in Rivian, Aurora Innovation, Air Transport Services and Vital Farms.