That fire that sales of Amazon's new Kindle was going to light under its stock plainly hasn't ignited yet.
The online giant's shares dropped 8 percent to $178 in after-hours trading after it reported fourth-quarter earnings that were off 57 percent for the same period a year ago. That decline put Amazon's stock roughly where it was a month ago, before a 12 percent market value jump.
Investors appear to be growing weary of Amazon's long-running campaign to bolster its digital offerings and distribution networks, in line with CEO Jeff Bezos' strategy to sacrifice short-term profit for long-term success. Tuesday's numbers come on the heels of a 73% drop in profits for the third quarter.
"Amazon's top-line under-delivered while its bottom-line over-delivered," according to Citigroup's Mark Mahaney. "Just when there's a glimmer of margin stabilization, there's the cloud of revenue deceleration."
Amazon said Tuesday that it expects its revenue for the quarter to come in between $12 billion and $13.4 billion, the latter figure matching the Street's expectations. The company's projections for its operating bottom line in the quarter ranged from a $100 million profit to a $200 million loss.
Some of the margin pressure may be coming from sales of its Kindle Fire. The company has pointed to runaway demand for its latest iteration of the Kindle during the holiday season, but declined to give specific sales figures. It did note that sales were up 177 percent during the nine-week holiday period a year ago.
It's worth noting, however, that Kindle Fire sales were never touted by Amazon as a driver of short-term profit; rather, the company see the popular devices as the primary base for its expanded digital offerings going forward.
"This is a growth stock still, so anytime a growth company misses on revenue, you're going to get a negative reaction, Raymond James analyst Aaron Kessler told MarketWatch.
For the quarter ended Dec. 31, Amazon had net income of $177 million, or 38 cents a share, compared to net income of $416 million, or 91 cents a share, for the same period a year ago.
Revenue was up 34 percent to $17.4 billion. Electronics and general merchandise was up 48 percent, media sales rose 15 percent and its "other" category -- which includes its Amazon Web Services -- was up 58 percent.
Operating expenses, however, were up 38 percent. That exceed the revenue growth, but was the lowest increase for a quarter in a year.