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Amazon’s holiday quarter profit tops estimates

SAN FRANCISCO – Amazon.com reported profit for the holiday quarter that topped analysts’ estimates, shrugging off the effects of heavy spending on fast delivery and original video programming to attract customers.

The online retailer on Thursday posted a fourth-quarter profit of $214 million, or 45 cents a share. Analysts on average had projected profit of 18 cents a share, according to data compiled by Bloomberg. Revenue was $29.3 billion, slightly below the average analysts’ estimate of $29.7 billion.

The results boosted Amazon following two consecutive periods of losses that incited questions about Chief Executive Officer Jeff Bezos’s methods of spending big and counting on sales growth to make up for minuscule profit. While the Seattle-based company ended 2014 with its first annual loss in at least 12 years, the profit last quarter helped blunt the decline.

“This means they are listening to investors,” said Michael Pachter, an analyst at Wedbush Securities Inc. in Los Angeles.

Shares surged as much as 9 percent in extended trading after earlier closing at $311.78 in New York. The stock fell 22 percent last year, compared with an 11 percent gain in the Standard & Poor’s 500 index.

Net income declined 12 percent from $239 million a year earlier while sales rose 15 percent from $25.6 billion, the company said in a statement. Operating expenses climbed 15 percent to $28.7 billion, which was a slower rate of increase than the 20 percent jump a year earlier.