Amazon Fills a Very Tall Order

Amazon's numbers were huge, no two ways about it, and it appears this company is ready to keep that momentum going. The company reported 85 cents a share, way ahead of the 72 cents Wall Street was looking for, on $9.5 billion in revenue, or nearly a half-billion dollars better than estimates.

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Source: Amazon.com

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Just how significant are these numbers? Net income on the quarter of $384 million compares to $225 million during the same quarter a year ago. And the $9.52 billion was $400 million above the high end of Amazon's own projections.

The news continues to get better as the company projects gross operating profits during the first quarter of $385 million to $475 million, or $275 million to $365 million if you take out the $110 million in stock based compensation. That's a 32 percent increase. And the company's revenue projection range of $6.45 billion to $7 billion is nicely ahead of the Street's mid-point of $6.4 billion, but not quite ahead of Citi's Mark Mahaney who expected Q1 revenue guidance with a mid-point of $6.76 billion.

Says Hamed Khorsand at BWS Financial, "It seems like the operating margin is starting to improve. That in itself was a surprise. Their gross margin was lighter than I expected, but was offset by managing their operating expenses."

Still, the moment Amazon's earnings were released, the stock went into retreat, leading Charles Lieberman at Advisors Capital Management to suggest, "I guess you can't please all of the people all of the time, even when you come in higher than expected, but then Amazon is priced for perfection. It's a very expensive stock."

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No sooner than those comments were made, Amazon got even more expensive, with the company doing a financial about-face, and turning positive in a very big way, up 2 percent on the news.

It looks as if Amazon is consolidating its online juggernaut and tightening its grip as the internet shopping leader. We already knew that the fourth quarter was particularly strong for online retailers.

With Amazon's results tonight, we now know where most of those shoppers did their clicking.

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