Amazon last night reported that its fourth-quarter earnings plunged after a strong surge in costs.
Net profit in the quarter to December 31 sank to $177m, compared with $416m a year before, and earnings per share dropped to 38 cents from 91 cents, short of analysts' forecasts.
Net sales grew 34.6% to $17.4 billion, but a 37.6% rise in costs ate away at the internet sales giant's margins.
Despite a hugely successful holiday season for its Kindle e-reader and tablet devices, with sales up 177% from a year earlier, Amazon was challenged by price cutting from rivals on the web and those with storefronts, and many with both.
"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 Amazon chief executive Jeff Bezos in a statement.
The company said to expect more of the same for the first quarter - strong sales growth but narrowing profit margins.
It forecast at best a 69% fall in operating income for the current quarter, and allowed for a possible net loss.
