Online bookseller Amazon posted its most profitable quarter but managed to hack off the cocaine nose jobs of Wall Street by badly missing estimates, sending its shares down more than 13 percent in after hours trading.
Wall Street is worried about the company’s determination to invest more in new areas, extremely low margins and its ability to consistently earn money.
For every dollar the company takes, it makes just 0.75 of a cent in profit which is incredibly low.
Amazon’s net profit for the fourth quarter, which includes the holiday shopping season, rose to $482 million up from $214 million a year earlier.
That figure was held back by rising operating costs.
The company’s shares plunged 13 percent to $551.50 after hours on Thursday, following a nine percent increase in regular trading.
Amazon notched its third consecutive profitable quarter for the first time since 2012, but Wall Street still wants more.
Net sales rose 21.8 percent to $35.75 billion, but missed analysts’ expectations of $35.93 billion.
Excluding a $1.2 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 26 percent compared with the fourth quarter of 2014.
Amazon Chief Financial Officer Brian Olsavsky defended the company’s results saying that foreign exchange rates had an unexpectedly large impact, but overall the company had “a very strong quarter and a strong year.”
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. AWS continues to be the fastest growing division within Amazon.
The company’s total operating expenses rose more than 20 percent to $34.64 billion in the fourth quarter.