Amazon founder and Washington Post owner Jeff Bezos delivers remarks during the opening ceremony of the media company's new location January 28, 2016 in Washington, DC. Bezos purchased the newspaper and media company in October of 2013 from the storied Graham family.
Chip Somodevilla—Getty Images
By Arathy S. Nair / Reuters
January 28, 2016

E-commerce giant Amazon’s profit in the holiday quarter missed analysts’ estimates by a wide margin as operating expenses rose and growth slowed in its cloud services business.

Shares of the world’s biggest online retailer plunged nearly 15% to $542 in extended trading on Thursday.

The company’s total operating expenses surged more than 20% to $34.64 billion in the fourth quarter.

Amazon has been spending on rolling out several new services for members of its $99-a-year Prime loyalty program, including one-hour delivery and original TV programming, to attract customers in a highly competitive online shopping market.

Net sales from its cloud services business, Amazon Web Services, rose 69.4% to $2.41 billion, compared with a growth of more than 78%in the third quarter.

Amazon’s net sales in North America increased 24% to $21.5 billion.

Net profit rose to $482 million, or $1.00 per share, in the quarter ended Dec. 31 from $214 million, or 45 cents per share, a year earlier.

Analysts on average had expected a profit of $1.56 per share, according to Thomson Reuters I/B/E/S.

Net sales rose 21.8% to $35.75 billion, but missed analysts’ expectations of $35.93 billion.

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