Amazon.com Inc. shares tumbled in aftermarket trading after the e-commerce company said its profit more than doubled, but still fell well short of analyst expectations.
Amazon's strategy has long been to invest most of the money it makes back into its businesses, particularly by expanding offerings in its $99-a-year Prime loyalty program and its cloud-computing business, called Amazon Web Services. After operating at or near a loss for years, it has finally also demonstrated the ability to turn a consistent profit recently.
Yet it wasn't able to match investor expectations in the fourth quarter. The Seattle company's profit more than doubled to $482 million, or $1 per share, from $214 million, or 45 cents per share last year. But that fell far short of the $1.55 analysts expected, according to FactSet.
Shares sank 14% in aftermarket trading. Amazon's revenue rose 22% to $35.75 billion from $29.33 billion last year. That figure also fell short of estimates, which averaged $39.9 billion.
For the current quarter ending in March, Amazon said it expects revenue in the range of $26.5 billion to $29 billion. Analysts surveyed by Zacks had expected revenue of $27.47 billion.
Amazon shares have declined 6.5% since the beginning of the year, while the Standard & Poor's 500 index has fallen slightly more than 7%. In the final minutes of trading on Thursday, Amazon's stock hit $632.20, having more than doubled in the prior 12 months.