Amazon has reported fourth quarter revenues of $17.43bn, 35% up on 2010, as profits fell 58% despite near tripling sales of the Kindle e-reader over Christmas.
Operating income for the three months ending 31 December 2011 was $260m, compared with $474m in Q4 of 2010.
“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our best-selling product across both the US and Europe,” said Jeff Bezos, founder and chief executive of Amazon.
The revenue quarter disappointed analysts, many of whose forecasts were substantially higher. The firm's shares fell in after-hours trading, according to The Guardian.
Analysts said sales of physical goods, such as books and DVDs, were being hit by the move to digital versions.
For the full year, Amazon's net sales increased 41% to $48bn, compared with $34.2bn the year before. Amazon's net sales were up 37% compared with 2010.
Operating income decreased 39% to $862m, compared with $1.41bn in 2010. Amazon's net income decreased 45% to $631m in 2011, compared with net income of $1.15bn in 2010.
Amazon's outlook for the first quarter of 2012 also fell short of analysts' expectations. The company expects first-quarter sales between $12bn and $13.4bn, but said it expected operating income to fall between a loss of $200m and a profit of $100m.