Posts First Annual Profit rode discounts and free shipping to strong fourth-quarter results, capping a year in which the Internet retailer posted its first annual profit.

Net income for the quarter ended Dec. 31 was $73.2 million or 17 cents per share, far better than the $2.7 million, 1 cent per share, it earned in the same period of 2002.

Amazon said Tuesday that some portions of its financial results were helped by foreign currency exchange rate fluctuations, including product sales and gains from converting multiple currencies within the company. But those gains were offset by the negative impact exchange rates had on about $690 million in company debt that is in euros.

For the quarter, the results were hurt by $23 million because of currency fluctuations against the dollar. Without that, the company would have had earnings of $96.2 million for the three-month period.

Sales for the three-month period were nearly $1.95 billion, up 36 percent from $1.43 billion a year earlier. chief executive Jeff Bezos said the company and customers benefited from year-round free shipping options and discount pricing. But analysts said some investors may be concerned Amazon has cut prices too deeply to gain customers.

"The question, I think, in some people's minds is, `Do they need to lower prices by the degree to which they have been?'" said Dan Geiman, an analyst with McAdams Wright Ragen.

News source: WTOP News - Posts First Annual Profit

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