Amazon.com said Tuesday its fourth quarter profit fell 45% to $97 million as it invests more to expand its hardware business.
Its profit of 21 cents per share fell short of analysts' estimate of 27 cents, compiled by FactSet. Operating income, watched closely by Amazon analysts, rose 56% to $405 million in the quarter.
Shares of Amazon rose sharply in after-hours trading on Tuesday, up $20.82 to $281.17. Its stock has risen 13% in the last six months in anticipation of strong holiday sales.
Its sales rose 22% to $21.27 billion during the key holiday period, lower than $22.26 billion estimated by analysts.
Amazon earned $177 million, or 38 cents a share, on revenue of $17.43 billion in the year ago period.
In a statement, Jeff Bezos, CEO of Amazon.com, emphasized the pace of change at Amazon as it attempts to sell more digital products through its lineup of Kindle devices and focus less on physical goods like books and CDs. The rate of sales growth for physical books in December — up 5% — was the lowest in its 17 years of business.
"We're now seeing the transition we've been expecting," he said. "After 5 years, eBooks is a multi-billion dollar category for us and growing fast — up approximately 70% last year."
For all of 2012, Amazon's sales grew 27% to $61.09 billion vs. $48.08 billion in 2011. Net loss totaled $39 million, or 9 cents per share, compared with net income of $631 million, or $1.37 per share, in 2011.
Its Kindle products continue to draw heavy consumer interest, Amazon says. The Kindle Fire tablet was the best selling item on its website for the second year in a row. Its four hardware devices — Kindle Fire HD; Kindle Fire; Kindle Paperwhite, an e-reader with built-in light; and Kindle, a basic e-reader — held the top four spots on Amazon's worldwide best seller charts since launch, the company says.
Meanwhile, its digital media catalog has grown to more than 23 million movies, TV shows, songs, magazines, books, audiobooks, apps and games in 2012. At the end of the year in 2011, it had 19 million.
In issuing financial guidance for the current quarter, Amazon said sales will range between $15 billion and $16.6 billion, or 14% and 26% higher from the year-earlier period.
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