Amazon.com, Inc. (NASDAQ: AMZN) has reported a 57 percent drop in its fourth quarter earnings as it spent heavily for the expansion of its business. Following the news, the shares decreased 9.5 percent to $175.84 in after-hours trading.
The Seattle-based Amazon's fourth quarter profit plunged to $177 million or $0.38 per share from $416 million or $0.91 per share last year. However, sales for the quarter grew to $17.43 billion from $12.95 billion.
Analysts surveyed by Thomson Reuters had expected a profit of $0.19 per share on revenue of $18.21 billion for the fourth quarter.
Kindle devices, including Fire tablets and e-readers, saw a whooping increase of 177 percent in the sales during the nine-week holiday period that ended Dec. 31, 2011 compared to last year.
"We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe," said Jeff Bezos, Amazon founder and CEO, in the statement.
For the full year 2011, Amazon earned $631 million or $1.37 per share, down from $1.15 billion or $2.53 per share previous year. Revenue grew to $48.08 billion from $34.2 billion.
Looking ahead into the first quarter, the company anticipates sales of $12 billion to $13.4 billion while the Street estimates $13.4 billion. The company also expects first quarter operating results between loss of $200 million and profit of $100 million. The guidance includes about $200 million for stock-based compensation and amortization of intangible assets.
In the pre-market, Amazon stock is currently trading down 8.10 percent at $178.70.