Amazon shares fell 8.71% to $177.50 in after-hours trading on Tuesday.�
For the fourth quarter of 2011, Amazon, which is the world�s largest online retailer, reported net income of $177 million, or $0.38 per share, compared with $416 million, or $0.96 per share reported for the same period in the previous year. The company�s sales rose 35% on a year-over-year basis to $17.4 billion. Analysts had forecast the company to report sales of $18.3 billion.�
Colin Gillis, analyst at BGC Partners LP in New York, told Bloomberg that CEO Jeff Bezos is squeezing profit margins in search of growth, looking to add customers by pushing free shipping and offering its Kindle devices at cut rate prices. Gillis said that this has conditioned investors to expect strong sales increases.�
Amazon�s outlook for the current quarter also disappointed investors. The company expects first-quarter operating income to range from a loss of $200 million to a gain of $100 million. Analysts had forecast first-quarter profit of $268.1 million. Amazon expects sales in the first quarter of 2012 to come in between $12 billion and $13.4 billion.�Bezos said that the company is grateful to the millions of customers who purchased Kindle Fire and Kindle e-reader devices during the holiday season, which made Kindle the company�s bestselling product across the U.S. and Europe. Bezos also said that the company�s millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.�
For full year 2011, Amazon�s sales rose 41% to $48.08 billion. The company�s operating income for the full year fell 39% on a year-over-year basis to $862 million. Net income dropped 45% to $631 million in 2011.�
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