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Prime helps drive Amazon's third quarter

The e-commerce giant's stock surges after posting a surprise profit for the second straight quarter.

Prime time is coming for Amazon.

The Seattle-based Internet retailer on Thursday reported a surprise profit for the third-quarter as sales jumped 23 percent. The report pleased investors, who pushed the company's shares to an all-time high in after-hours trading.

There's no mystery why Amazon's business keeps growing. The company keeps finding ways to rope in customers and give them reasons to buy through Amazon.

The latest installment is Prime, a $99-per-year service that provides complimentary two-day and sometimes one-day deliveries. That's like catnip for shoppers, who don't have to change out of their pajamas to browse Amazon's seemingly endless catalog.

Amazon doesn't reveal how many Prime subscribers it has so it's something of a "black box," said Forrester analyst Sucharita Mulpuru. "All we know is the number is north of 10 million south of 100 million in terms of subscribers and the profitability of them," she said.

Still, the company is clearly pushing Prime, which it sees as a winning formula. In July, the company held a one-day sale to celebrate its 20th anniversary and, of course, lure more Prime customers. The sale, which was captured in the third-quarter report, resulted in orders for 34.4 million items. That's more than the roughly 5 million items Amazon sells on an average day and double the 16 million items it sold during Cyber Monday last year, according to the company.

The strength of Prime, as well as the Amazon's cloud-computing services, was evident in the third quarter. Sales in North America rose nearly 30 percent, while revenue from Amazon Web Services, the cloud business, jumped 78 percent.

Amazon reported a profit of $79 million, or 17 cents a share, on $25.4 billion in revenue. By comparison, analysts had expected a 13-cent loss on $24.9 billion in revenue.

Shares surged at one point to more than 11 percent to $620 in after-hours trading Thursday.

The e-commerce company also expressed confidence the it's business would like keep growing. In a statement, Amazon said it "expects (a) record holiday season" during which a majority of the units shipped would be through Prime.