Online retailer Amazon.com, Inc. (AMZN) said Tuesday after the markets closed that its fourth quarter profit dropped 58% from last year, as higher costs and expenses offset a 35% increase in net sales.
However, the company's quarterly earnings per share came in above analysts' expectations, but its quarterly sales missed analysts' forecast. At the same time, the company gave a weak sales forecast for the first quarter and warned of a potential operating loss in the quarter.
The Seattle, Washington-based company reported net income for the fourth quarter of $177 million or $0.38 per share, compared to $416 million or $0.91 per share for the year-ago quarter.
On average, 36 analysts polled by Thomson Reuters expected the company to earn $0.19 per share for the fourth quarter.
Net sales for the fourth quarter rose 35% to $17.43 billion from $12.95 billion in the same quarter last year. Thirty-six analysts had a consensus revenue estimate of $18.21 billion for the fourth quarter.
Total operating expenses for the fourth quarter jumped 38% to $17.2 billion from $12.5 billion a year earlier. As a result, operating income for the quarter slipped 45% to $260 million from $474 million last year.
North America segment sales, representing the company's U.S. and Canadian sites, rose 37% to $9.9 billion in the fourth quarter.
International segment sales, representing the company's U.K., German, Japanese, French, Chinese, Italian and Spanish sites, grew 31% to $7.5 billion.
For the fourth quarter, worldwide media sales increased 15% to $6.01 billion, while worldwide electronics and other general merchandise sales surged 48% to $10.91 billion.
During the nine-week holiday period ending December 31, Kindle unit sales, including both the Kindle Fire and e-reader devices, increased 177% over the same period last year, the company said.
In late September, Amazon launched its first and long awaited full-color tablet, Kindle Fire, to compete with industry leader Apple, Inc.'s (AAPL) iPad and iPad 2. The Kindle Fire was aggressively priced at $199, and started shipping from November 15.
Amazon late last month released its "Best of 2011" lists, with its Kindle Fire tablet computer emerging as the best selling electronic product in the year, based on total units sold.
"We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe," said Jeff Bezos, founder and CEO of Amazon.com on Tuesday. "Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold."
Looking forward, the company forecast first quarter net sales of $12.0 billion to $13.4 billion, representing a growth of 22% to 36% as compared to the first quarter of 2011. Analysts currently expect the company to post revenue of $13.41 billion for the first quarter.
The company also said it expects first quarter operating results to range between a loss of $200 million and a profit of $100 million. The guidance includes about $200 million for stock-based compensation and amortization of intangible assets.
Amazon shares, which have traded in a range of $160.59 to $246.71 over the past year, closed Tuesday's regular trading session at $194.44, up $2.29 or 1.19%. The stock is currently losing $15.20 or 7.82% in after hours trading.
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