Amazon posted profits of $214m (£142m) in the three months until 31 December, down on the same period in 2013.
The online retailer, well known for focusing on growth rather than profits, posted revenue of $26.33bn (£19.5bn) over the three-month period, missing expectations.
However, Amazon Prime membership rose 53% during 2014, despite price rises put in place by the Seattle-based company.
Shares in Amazon rose by more than 11% in extended trading after the company’s quarterly results beat expectations.
Investors were cheered by evidence that the company’s huge investment in areas outside its core online retail empire was starting to pay off.
In recent years, Amazon has expanded beyond ecommerce into new areas such as cloud computing and video streaming, a strategy which has affected profitability.