Amazon Sees Sales Surge, but Profit Comes Up Short

Amazon expected to be the runaway winner of the holiday shopping season, instead it strolled but did not run.

Revenue for the e-commerce giants during the fourth quarter was less than was expected, reported the company based in Seattle, Washington on Thursday. It turned out that its profit was even less.

Wall Street responded negatively to the news as the $24 billion that investors added to the market value earlier in the day vanished and even more left as well.

Amazon can prompt a number of strong emotions and on Thursday, they all were on display. At first, the faith in the company showed as investors thought the company would measure up to the outsized expectations, then came the fear it might be nothing but a dream.

Wall Street analysts said number for the fourth quarter, as disappointing as they were, did not put a dent in its optimism.

One analyst called the results an expectations correction not a fundamentals correction.

He added that there was not anything within the number that marks a dramatic change in the growth or the profit profile of Amazon.

Instead, the swings in moods from positive to negative reflected an out of hand enthusiasm.

The past three quarters for the company have generated result at the bottom line that were above expectations on Wall Street, said one analysts, which in turn set up the expectations that more of the same would be seen and it wasn’t.

Fourth quarter revenue soared to over $35.7 billion, which was up by 22% over the same period a year ago of $29.3 billion. As impressive as that figure was, analysts were expecting it to be more at $35.92 billion.

Wall Street has been trained by Amazon not to expect a profit. However, part of the assumptions that were optimistic thought profit would be $1.56 per share, up from a year ago by 45 cents per share. However, the company earned only $1 per share for the quarter.

Investors pushed share up over 100% in 2015 and it was up more than $52 early Thursday. However, when the results were released, the stock fell after hours by over $84.

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