Amazon.com Inc. saw big sales during the holiday season, reporting Tuesday that fourth-quarter revenue rose 22% to $21.27 billion from a year earlier.
But the Internet retail giant's sales and earnings missed Wall Street's estimates. Profit for the three months that ended Dec. 31 declined 45% to $97 million, or 21 cents a share, compared with $177 million, or 38 cents, in the same quarter of 2011.
Analysts had expected the e-commerce company to post revenue of $22.26 billion and earnings of 27 cents a share.
Nonetheless, Amazon's stock surged in after-hours trading, rising more than 9% on signs the company's operating margins were improving. During regular trading before earnings were released, shares closed down $15.69, or 5.7%, at $260.35.
Operating income was a highlight of the company's quarterly results, increasing 56% to $405 million in the fourth quarter, compared with $260 million a year earlier.
For the current quarter, Amazon expects sales of $15 billion to $16.6 billion, a 14% to 26% growth from the first quarter of 2012.
It was a good Christmas for Amazon's Kindle family. The company said that for the second year in a row, its tablet was the most popular item for customers, with the Kindle Fire HD the "No. 1 bestselling, most gifted and most wished-for product" across the company's merchandise lineup.
"At year-end, Kindle Fire HD, Kindle Fire, Kindle Paperwhite and Kindle held the top four spots on the Amazon worldwide bestseller charts since launch," the company said.
As is typical for Amazon, it did not break out sales figures for its tablets and e-readers.
Jeff Bezos, founder and chief executive of Amazon, said the company had seen huge growth in its electronic book business as consumers shift to digital texts.
"We're now seeing the transition we've been expecting," he said in a statement. "After five years, eBooks is a multibillion-dollar category for us and growing fast — up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. We're excited and very grateful to our customers for their response to Kindle."
Amazon also said its digital media selection grew to more 23 million movies, TV shows, songs, magazines, books, audio books, apps and games in 2012, an increase from 19 million at the end of 2011.