Amazon’s Profit More Than Doubles

For Amazon.com, the fourth quarter was even sweeter than usual. But Wall Street reacted negatively because profit margins slid slightly.

On Wednesday the company announced that fourth-quarter profit more than doubled to $207 million, or 48 cents a share, from $98 million, or 23 cents a share in the fourth quarter last year. It reported sales of $5.67 billion, up 42 percent from $3.99 billion in the quarter last year.

The fourth quarter, which includes the critical holiday shopping season, is reliably the company’s strongest period, and this year proved no different.

“This quarter showed accelerated sales growth and record operating profits,” Jeff Bezos, the chief executive, said in a statement released with the earnings. “In our view, these unusual financial results are driven by one thing: continuously improving the customer experience.”

Analysts had forecast earnings of 48 cents a share on revenue of $5.37 billion for the quarter, according to current estimates from Thomson Financial.

Despite the robust report, Amazon shares were down 11 percent in after-hours trading. Analysts pointed to weaker profit margins. Amazon’s gross margin fell in the fourth quarter to 20.6 percent from 21.3 percent, a year earlier, as the company continued to invest in new technology.

Before the company announced its financial results, shares of Amazon rose 26 cents to $74.21.

Amid fears of a slowdown in consumer spending causing jitters on Wall Street, Amazon forecast sales in the current quarter of between $3.95 billion and $4.15 billion, an increase of between 31 percent and 38 percent from first quarter 2007.

It said operating income is expected to grow as much as 38 percent in the first quarter.

Sales for the entire are forecast to grow between 26 percent and 33 percent over 2007, the company said.

Amazon.com’s stock price has been on a wild ride this past year, reaching just over $100 a share in October, dropping into the $70 range in November, only to start the year at $96.25.

During the fall, Amazon introduced an electronic book device called the Kindle and an online store where customers can download e-books. Analysts had not expected that product to have a significant effect on the fourth quarter.

Last year, the company also introduced the Amazon MP3 digital music store to sell downloaded music, including tracks from EMI and Universal, making it a significant competitor to Apple’s iTunes.