Exceeding its own forecasts as well as analysts' predictions, Amazon recorded fourth quarter earnings of $5m (£3.5m), compared with a net loss of $545m (£382.2m) for the same period a year ago.
The company claimed that lower book prices and cost-cutting measures helped it reach profitability.
Amazon.com posted record net sales of $1.12bn (£780m) for the fourth quarter of 2001, compared with $972m for the same period in 2000. Amazon said it was the company's first-ever billion-dollar quarter.
"Our improvements in productivity allowed us to lower book prices and now allow us to offer free shipping," said Amazon chief financial officer Warren Jenson. "We expect that these money-saving initiatives for customers will continue to play an important role in our growth."
Looking ahead, Amazon said it expects first-quarter net sales in the 2002 fiscal year to be between $775m (£543m) and $825m (£578m) - a growth rate of 11-18%. The company expects net sales for the whole of 2002 to grow by 10% or more.