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Amazon Misses on Q4 Sales, Stock Plunges After Hours

The e-commerce and burgeoning media behemoth missed on revenue for the second straight quarter

A surge of people shopping online at the end of the year couldn’t save Amazon, which reported about $1 billion less in fourth-quarter revenue than expected, sending the e-commerce and burgeoning media behemoth’s stock down more than 3 percent in after-hours trading.

After the close of market Thursday, Amazon reported $43.7 billion in revenue and earnings of $1.54 a share for the three months ended Dec. 31, a substantial improvement from the $37.8 billion in revenue and earnings of $1 a share the company reported in the corresponding period last year. And after falling short of analyst expectations last quarter, Amazon again missed its quarterly revenue target of $44.7 billion, although it did handily top earnings per share expectations of $1.35.

Amazon also provided some guidance for its next quarter, projecting operating income of between $250 million and $900 million in the first three months of 2017, down from $1.1 billion in the corresponding period in 2016. It is, however, forecasting sales growth of between 14 percent and 23 percent year-over-year. The company will also be hiring 100,000 full-time positions in the U.S. over the next 18 months.

Amazon’s earlier earnings miss didn’t hit its stock too much — the company closed Thursday at $839.95 a share, close to its 52-week high of $847.21. And the Seattle company’s shares have risen 12 percent this calendar year, as the company continues to expand into sectors such as auto parts and deliver award-winning original content to subscribers of its Amazon Prime Video.

Amazon Studios’ TV series “Mozart in the Jungle” and “Transparent” each received multiple Golden Globe nominations this year, and “Manchester by the Sea,” a film the company acquired at last year’s Sundance Film Festival for $10 million, became the first movie from a streaming service to receive a Best Picture nomination at the Oscars.

“Manchester by the Sea” star Casey Affleck, who won the Golden Globe for Best Actor in a Motion Picture – Drama, also got an Oscar nomination, as did director and writer Kenneth Lonergan for Best Director and Best Original Screenplay, as well as Michelle Williams for Best Supporting Actress.

Amazon also announced a bigger foray into financial services earlier this month, launching a credit card available only to subscribers of its Prime shopping service that gives users 5 percent cash back on Amazon purchases. Amazon founder and CEO Jeff Bezos touted the growth of its Prime program in the earnings release.

“Our Prime team’s customer obsession kept them busy in 2016,” Bezos said in a statement announcing the earnings. “Prime members can now choose from over 50 million items with free two-day shipping — up 73 percent since 2015. Prime Video is now available in more than 200 countries and territories. Prime Now added 18 new cities, which means millions more members now get one and two hour delivery. New benefits were also added to the list, like Prime Reading, Audible Channels for Prime, Twitch Prime and more. And customers noticed — tens of millions of new paid members joined the program in just this past year.”

Amazon executives will hold a conference call at 5:30 p.m. ET to discuss the earnings.