Shares of world’s largest online retailer Amazon.com Inc. (NASDAQ: AMZN) have risen sharply in trading today even as the company reported weaker-than-expected sales in its fourth quarter.
After market close on Tuesday, Amazon reported fourth-quarter earnings of $97 million, or $0.21 per share, compared to $177 million, or $0.38 per share reported for the same period in the previous year. The company’s sales for the quarter were $21.27 billion, up from $17.43 billion reported for the same period in the previous year.
Analysts were expecting the online retailer to report earnings of $0.28 per share and revenue of $22.26 billion for the fourth quarter.
Despite missing top-line and bottom-line estimates, Amazon.com shares have edged higher as investors were encouraged by a sharp rise in the company’s operating income for the quarter. AMZN’s operating income for the quarter rose from $260 million in the year ago quarter to $405 million in the fourth quarter of 2012.
Another reason for the sharp rise in shares is the strong performance of Kindle devices. The company said that its Kindle Fire HD continued its run as the #1 best selling item on Amazon worldwide. The company said that at year end, Kindle Fire HD, Kindle Fire, Kindle Paperwhite and Kindle held the top four spots on AMZN worldwide best seller charts since launch.
Jeff Bezos, founder and CEO of Amazon.com, said that the company is now seeing the transition it has been expecting. Bezos further said that after 5 years, eBooks is a multi-billion dollar category for AMZN and growing fast.
Amazon also provided guidance for the first quarter of 2013. The company expects first-quarter revenue to be between $15 billion and $16.6 billion.
AMZN shares rose to an intra-day high of $284.20 earlier today. At last check, the stock was trading 5.70% higher at $275.20 on above average volume of 9.63 million.