Amazon stocks soar after bumper sales in the last quarter of 2019

The company posted revenues of $87.4bn for Q4 2019, with AWS up 34 per cent

Amazon reported better-than-expected earnings for the fourth quarter of 2019 on Thursday, sending the company's stock up over 12.5 per cent in after-hours trading.

Contrary to investor fears, the company posted revenues of $87.4bn for the last three months of 2019, an increase of 21 per cent compared to the same quarter a year ago.

Amazon said its net income in the fourth quarter was $3.3bn - or $6.47 per share.

The results are well ahead of Wall Street analysts' expectations. They had predicted Amazon's revenue to be somewhere around $2bn, with a profit of $4.03 per share.

The results suggest that Amazon's huge investment in faster delivery did not impact profits as much as some analysts and investors had feared.

According to Amazon, expansion of one-day shipping across the US was one of the main reasons for its successful holiday season.

More people joined its Prime membership in the fourth quarter than any other quarter in the company's history, taking the total count of global Prime subscribers to over 150 million.

Amazon had achieved the milestone of 100 million Prime members in 2018, and it took just one more year to add 50 million more people in that list.

The company plans to invest another $1bn on shipping improvements in the first quarter of 2020.

Amazon also reported improved growth in Amazon Web Services (AWS) unit - its cloud computing business, whose net sales increased 34 per cent, to $9.95bn. The unit contributed $2.6bn of the $3.9bn in operating income for the fourth quarter.

However, the news of Amazon's strong results comes amid reports that the company currently lists thousands of banned, unsafe or mislabelled products on its platform, and refuses to take any legal responsibility for them.

In August, the Wall Street Journal reported that it had found more than 4,100 such items, including toys with high lead content, medication lacking child safety warnings, faulty motorcycle helmets, banned sleeping wedges for babies, and unlawfully imported prescription drugs, freely available to buy on Amazon.

However, Amazon doesn't take legal responsibility for such unsafe items as the company is technically not selling those items, and any disputes arising from the use of such faulty products have to be taken up with the third-party seller.

In response to the Wall Street Journal story, Amazon published a post sharing information about its safety and compliance programme.

"Safety is a top priority at Amazon. Products in our store must comply with relevant laws and regulations and our sophisticated tools prevent non-compliant products from being listed," the company said.

"Every few minutes, our tools review the hundreds of millions of products, scan the more than five billion daily changes to product detail pages, and analyse the tens of millions of customer reviews that are submitted weekly for signs of a concern and investigate accordingly."

"Our tools use natural language processing and machine learning, which means new information is fed into our tools daily so they can learn and constantly get better at proactively blocking suspicious products."