Amazon Books Better-Than-Expected Quarterly Profit

Fueled by the surging popularity of its Kindle reader, effective holiday discounts and free shipping, which we skeptics used to argue would bleed the Seattle-based company dry, online retailer Amazon (AMZN) posted better-than-expected results on Thursday. Net income soared 71% to $384 million, or 85 cents per share, versus net income of $225 million, or 52 cents per share, in the year-ago quarter. Revenue increased 42% to $9.52 billion in the fourth quarter. Analysts surveyed by Bloomberg forecast profit of 72 cents on $9.04 billion in revenue.Thursday's results show my skepticism may have been short-sighted. I along with most of Wall Street was convinced that Amazon's best days were behind it. In an article for following a disappointing earnings results I wrote that "investors who had sent Amazon shares up 30% over the past year were quick to flee, reasoning that they've seen all the good news they're going to see for a while."

About the only downside was the first-quarter operating income guidance of $275 million to $365 million, indicating that Amazon may expect U.S. consumer spending to rebound until unemployment at least dips below 10%. Sales, though, are expected to be $6.45 billion to $7 billion versus the $6.42 billion predicted by analysts.

Shares of the world's largest Internet retailer rose in after-hours trading. They are up more than 150% over the past year, so it shows you what I know. By the way, the Kindle store now features more than 410,000 books, 8,000 blogs and 130 newspapers and magazines.

Other tech companies today reported mixed results.

Microsoft Corp. (MSFT) , the tech stock that Wall Street loves to hate, posted big quarterly gains thanks to what the No. 1 software company called "exceptional" demand for its Windows 7 operating system. Shares of the world's largest software company were up after the release of earnings following regular trading.

Qualcomm Inc. (QCOM) shares were hammered after the world's largest wireless chipmaker angered Wall Street with its lackluster earnings guidance because of the growing popularity of low-end cell phones in emerging markets. The stock fell more than 14% in regular trading though it rebounded in after-hours action.

Nokia Corp (NOK) reported better-than-expected quarterly results. The No. 1 cell phone maker was helped by share gains in the smartphone market despite strong competition from Apple's (AAPL) phone and a strong performance in emerging market, the Helsinki-based company said in a statement. Shares were off in after-hours trading, giving back some of their earlier gains.
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