Amazon raising the price of Prime memberships by $20

The Prime price increase is the second ever for the service.

Posted: Apr 27, 2018 8:31 AM

NEW YORK (AP) — Amazon announced Thursday that the price of an Amazon Prime membership will rise to $119 from $99.

The price change will take effect for new members on May 11 and will apply to renewals starting June 16.

The Prime price increase is the second ever for the service. A year of Prime cost $79 when it was introduced in 2015. The price was raised to $99 in 2014.

Amazon finance chief Brial Olsavsky revealed the plan during an earnings call with analysts Thursday night.

Amazon's first-quarter profit more than doubled from a year ago, fueled by the growth of online shopping and the cloud-computing service it provides to businesses and government agencies.

Its results blew past Wall Street expectations, and the online retailer's shares soared 7 percent in after-hours trading.

Amazon has grown rapidly since its start as an online bookstore in 1995. It makes Echo speakers, designs furniture and delivers food from restaurants. Still, online retailing is its biggest business: Sales from Amazon's online stores rose 18 percent to $26.9 billion, accounting for slightly more than half the company's total revenue.

The company recently disclosed for the first time that it had more than 100 million paid Prime members worldwide, who get faster shipping and other perks.

At its cloud-computing business, called Amazon Web Services, sales rose 49 percent to $5.4 billion.

Overall revenue jumped 43 percent to $51 billion, beating the $49.9 billion analysts expected.

The company earned $1.63 billion, or $3.27 per share, in the three months ending March 31 — almost triple the $1.24 per share analysts expected, according to FactSet. It's the second time Amazon's quarterly profit has topped $1 billion. In the previous quarter, which included the busy holiday shopping season, it had a profit of more than $1.8 billion.

The blockbuster profits come as the company and its chief executive have been criticized by President Donald Trump, who has tweeted several times that the company doesn't pay enough taxes, should pay the U.S. Postal Service more for shipping, and that The Washington Post, owned by Amazon founder and CEO Jeff Bezos, is a lobbyist for the company.

Trump signed an executive order earlier this month to study the post office's finances and costs, including its pricing the package delivery market. The executive order did not mention Amazon by name.

Amazon.com Inc. has been silent about the attacks from Trump, and executives in a call with investors Thursday did not mention the president. They did say, however, that the company plans to invest further in its own shipping services, which includes planes and on-the-ground logistics that can ship its boxes.

The Seattle-based online retailer's stock, which closed at $1,517.96 on Thursday, soared past $1,620 in extended trading.

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