Amazon on Thursday forecast first-quarter sales below Wall Street estimates as new regulations in India created uncertainty around one of its key growth markets, dimming the online retailer’s report of record holiday season profit.
Shares of the company fell 1.7 percent to $1,690 after the bell.
Amazon posted a 63 percent jump in net income to $3.03 billion for the fourth quarter, ahead of analysts’ estimates.
The company has used fast shipping and streaming video to attract shoppers, creating an e-commerce powerhouse. Fees merchants pay Amazon to ship and advertise their products have fattened the company’s once-thin profit margins.
Yet investors turned their attention abroad where Amazon has long lost money in the hopes of future profit. Though its operating loss shrunk to $642 million from $919 million in the quarter, rules in India created concern. These disallow companies from selling products via vendors in which they have an equity interest.
Brian Olsavsky, Amazon’s chief financial officer, said on a call with reporters, the “situation in India is a bit fluid right now.”
“There’s a bit of uncertainty,” he said, adding that Amazon’s goal is to minimize the impact on its customers and sellers. “India remains a good long-term opportunity,” he said.
The company began removing a wide array of products from its India website late on Thursday to comply with the new foreign investment curbs that kick in on Feb. 1, Reuters reported.
The company forecast net sales of between $56 billion and $60 billion for the first quarter, missing the analyst average estimate of $60.77 billion, according to IBES data from Refinitiv.