Amazon reported its first quarter ever with over $ 10 billion in sales, however, expectations were high because the company was benefiting from consumers' increasing the number of purchases over the Internet this holiday season.
Also weighing on the stock - which trades more than 50 times expected earnings - were modest margins of the company and warm guidance in the first quarter.
The Seattle, operating margins of e-commerce giant based in Washington for the period were 3.8% - in anticipation of the company, but below analysts expected margin of 4.2%.
Chief Financial Officer Tom Szkutak said in a conference call that the company needed to invest in additional infrastructure to support its sales on the rise, adding that Amazon would continue to invest in 2011.
"We have to see how much you invest," he said when asked about plans for 2011.
Amazon shares fell 8.7% to $ 168.00 in electronic trading. The stock was up 5.2% during the regular session on Thursday and has won more than 50% in the last 12 months.
"While revenues grew by more than $ 3.4 billion in the quarter, net income only increased $ 32 million, less than a penny for every dollar of revenue growth," said BGC Partners analyst Colin Gillis. "The margin expansion is not guaranteed, given the nature of business as a discount retailer Amazon."
sales in the fourth quarter of Amazon rose to 12.95 billion U.S. dollars, at the upper end of the estimate of the company in October for sales of between $ 12 billion to $ 13,300,000,000, but below the average estimate of analysts Thomson Reuters of 13.01 billion U.S. dollars. Excluding currency translation effects, sales rose 37%.
Meanwhile, for the first quarter, Amazon is projecting a revenue increase each year between 28% and 39%, the midpoint of which is above the average analyst estimate by 31% growth. However, despite the jump in revenue, Amazon is projecting operating revenue for the first quarter to fall between 2% and 34% over the same quarter last year.
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