The Kindle Fire was expected to ignite Amazon’s (Nasdaq: AMZN) fourth-quarter earnings. Instead the company flamed out amid lower-than-expected sales.
In an after-hours earnings announcement today, the online retail giant reported net income of $177 million for the quarter ended December 31 – less than half the $416 million the company made during the same quarter a year ago. That was more than analysts had expected, but the company’s $17.4 billion in quarterly revenue trailed consensus forecasts of $18.3 billion. The sales miss was enough to send the stock tumbling more than 9% in after-hours trading.
As our own Jason Cimpl noted earlier today, it wasn’t supposed to be this way. Amazon was expected to post blowout holiday sales after the November debut of its new Kindle Fire electronic tablet. Amazon does not release unit sales numbers for the Kindle Fire or its Kindle e-readers, but sales of all Kindle units increased 177% over last year’s holiday period.
While the company’s revenue grew 35% from the same quarter a year ago, it wasn’t enough to offset $17.2 billion in operating expenses.
Though the Kindle Fire is still relatively new, it might not be enough to boost earnings this quarter either. Amazon is forecasting between $12 billion and $13.4 billion in revenue during the current quarter, which would trail the $13.42 billion most analysts were expecting.
Having fallen to $176.70 in after-hours, Amazon’s stock is at its lowest price since January 12.