Amazon reported weaker-than-expected sales and earnings for the fourth quarter on Tuesday.
But investors quickly seemed to give the online-retailing giant a pass — partly because they figured the results reflected general economic reality, and partly because Amazon continues to be an unrivaled, trailblazing juggernaut that keeps all its competitors on their toes.
Revenue jumped 22 percent during the quarter to more than $21 billion, but fell short of analysts' expectations of more than $22 billion. And Amazon's profits were just $97 million during the period, compared with $177 million a year earlier.
Of more concern was that Amazon expects revenue of only $15 billion to $16.6 billion during the first quarter, compared with analyst estimates of $16.9 billion.
"Revenue was light," said Kerry Rice, an analyst at Needham & Co., according to CNBC.com. "In general, weaker than everyone expected on the top line and guidance was similarly weaker than what everyone was expecting on the top line. [But] I'm not that surprised. We've had a lot of negative retail data points [and] general suggestions have been that e-commerce was not as strong [during the fourth quarter] as people had expected."
Still, as expected, Amazon garnered a huge share of online holiday shopping last quarter. One reason its bottom line disappointed analysts was robust sales of Kindle — to the tune of shipments of about 5 million units of the tablet — which basically does nothing for Amazon's profit margins.
Meanwhile, Amazon continues its relentless expansion by building massive distribution centers in the nation's exurbs to shorten the distance between online shoppers and its goods. Recently, the company announced that it plans a million-square-foot warehouse an hour east of San Francisco. (Here, a Bloombergvideo shows how Amazon's highly efficient warehouse robots fulfill orders.)
Amazon long kept distribution centers out of California to avoid the state's high sales tax. But the company finally reached a deal with the state and began collecting sales tax from California orders in fall, which analysts expected to drag down earnings.
The company also reported growth in its cloud computing business, and said it is also investing in Chinese and European markets, CNBC reported.
Amazon's brick-and-mortar competitors aren't sitting still. Walmart, for instance, recently began a service that lets people pay online and pick up in stores. Rivals are also trying to reduce "showrooming," in which shoppers peruse goods in a store only to later order them online.
Still, in a recent YouGov poll of brand popularity, Amazon handily beat competitors in the discounters category, beating Target, Kohl's, Costco and JCPenney.
And just as competitors increase their nimbleness, Amazon is also pushing itself into new territory. In Seattle, it's added limited online restaurant delivery via its expading Amazon Freshservice. Late last year, there was word that Staples would host Amazon lockers for customers to easily pick up orders there.
Ironically, with 2013 likely to bring even more competition in retail, the National Retail Federation honored Amazon founder and CEO Jeff Bezos in December with one of its highest honors.
"Amazon makes us a better competitor," said Terry Lundgren, Macy's CEO.
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