Share this article

print logo

Amazon down 11%; price hike likely

Amazon.com Inc.’s willingness to gain customer loyalty by shouldering the costs of nationwide shipping and access to online movies has its limitations.

The stock fell by 11 percent on Friday after a 20 percent jump in operating costs led Amazon to miss analysts’ fourth-quarter profit estimates. The company is now considering raising the price of its $79-a-year Prime membership for the first time.

That service, which includes two-day shipping and endless video streaming, may increase by $20 to $40 a year in the U.S., the company said.

Amazon’s expenses have been climbing as Chief Executive Officer Jeff Bezos pumps money into new initiatives such as research on home-delivery drones.

Chief financial officer Tom Szkutak said the potential increase in Prime is the result of higher fuel and shipping costs.

Amazon hasn’t lifted the price since introducing the service nine years ago, he said.