Amazon.com Inc's (AMZN.O) holiday quarter profit missed Wall Street's estimates by a wide margin as the world's No. 1 online retailer faced rising operating costs and growth slowed in its cloud services business.
Its shares plunged 12 percent after hours on Thursday, after its quarterly report, following a 9 percent increase in regular trading.
Fourth-quarter net profit rose to $482 million, or $1.00 per share, in the quarter ended Dec. 31 - marking its largest quarterly profit on record - up from $214 million, or 45 cents per share, a year earlier.
That was well below analysts' average forecast for profit of $1.56 per share, according to Thomson Reuters I/B/E/S.
It was the first time Amazon has reported three consecutive profitable quarters since 2012.
Net sales rose 21.8 percent $35.75 billion, but missed analysts' expectations of $35.93 billion.
Net sales from its cloud services business, Amazon Web Services, rose 69.4 percent to $2.41 billion, compared with a growth of more than 78 percent in the third quarter.
Amazon's net sales in North America increased 24 percent to $21.5 billion.
The company's total operating expenses surged more than 20 percent to $34.64 billion in the fourth quarter.
Amazon has been spending on rolling out several new services for members of its $99-a-year Prime loyalty programme, including one-hour delivery and original TV programming, to attract customers in a highly competitive online shopping market.
Amazon dominates the worldwide retail e-commerce market, which according to eMarketer totalled $1.67 trillion last year and is expected to grow by 22 percent this year.
Amazon’s Prime programme is estimated by some analysts to have around 50 million members worldwide. In a decade since its launch, Prime has become an engine of growth for Amazon and an important testing ground for new offerings like one hour delivery and ambitious original TV programming.
(Reporting by Arathy S Nair in Bengaluru; Editing by Kirti Pandey, Stephen R. Trousdale and Bill Rigby)
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First Published On : Jan 29, 2016 04:15 IST