Despite strong sales of its Kindle devices during the holidays, Amazon.com Inc.'s fourth-quarter earnings missed expectations, sending the online retail giant's shares plunging in after-hours trading Tuesday.
Amazon, whose shares rose $2.29, or 1.2%, to $194.44 in regular trading, reported its results after the markets closed. Its shares quickly fell more than 9% to $176.58 in after-hours trading.
The Seattle e-commerce company said sales for the three months that ended Dec. 31 rose 35% year over year to $17.4 billion, which fell far short of what Wall Street analysts had expected.
Meanwhile, profit plunged 58% to $177 million, or 38 cents a share, as Amazon was hampered by heavy spending on infrastructure and development, tight margins and other expenses. That was compared with profit of $416 million, or 91 cents, in the year-earlier period.
Jeff Bezos, Amazon's founder and chief executive, said "millions" of customers purchased Kindle devices over the holidays, making it the company's bestselling item in the U.S. and Europe. During the nine-week holiday period that ended Dec. 31, sales of Kindle e-readers and Kindle Fire tablets increased 177% over the same period last year. The company didn't release exact device sales figures.
Amazon also gave a first-quarter outlook that fell short of analysts' expectations, projecting sales of $12 billion to $13.4 billion, up 22% to 36% compared with the first quarter of 2011.