Happy holidays for Amazon

The online retailer beats analysts' sales estimates and earnings more than double but stock slides after hours in response to lower than expected margins.

Subscribe to Technology
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
Michal Lev-Ram, Fortune reporter

New York (CNNMoney.com) -- Amazon.com reported fourth quarter sales that beat analysts' expectations, thanks to a strong holiday shopping season.

Despite concerns that a slowdown in U.S. consumer spending could put a dent in Amazon's 2008 sales, the company issued higher than expected sales guidance for the first quarter and the full year.

Amazon's stock initially surged following the news but wound up sliding more than 12% in after hours trading as Wall Street digested lower than expected profit margins. The stock rose slightly in regular trading on the Nasdaq Wednesday.

The Seattle, Washington-based company said that its revenues rose 42% to $5.67 billion. Wall Street had expected revenues of $5.37 billion, according to Thomson First Call.

Amazon's net income came in at $207 million, or 48 cents per share, up 112% from the year-ago quarter, and in line with analysts' estimates.

"This quarter showed accelerated sales growth and record operating profits," Jeff Bezos, founder and CEO of Amazon.com, said in a written statement. "In our view, these unusual financial results are driven by one thing: continuously improving the customer experience."

The company also surprised Wall Street with strong sales forecasts. The company said it expects first quarter sales to be between $3.95 billion and $4.15 billion, higher than Wall Street's projection of $3.92 billion.

But the company's gross profit margins came in at 20.6%, down from last year's 21.3% and below analysts' estimates.

"We expect they're seeing stronger sales growth on lower margin items," Piper Jaffray analyst Aaron Kessler said after the call.

For 2008, Amazon said sales should be between $18.75 billion and $19.75 billion, ahead of analysts' estimates of $18.25 billion.

Amazon (AMZN, Fortune 500) is the world's largest online retailer. As such, the company also is benefiting from strong demand overseas. The company reported that its international sales, which now account for 46% of total sales, went up 46% in the fourth quarter.

Last year, the company launched several new products including an online music store which it plans to roll out internationally later this year.  To top of page

Photo Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.