Amazon.com posted higher-than-expected fourth quarter results today, with net sales increasing 18 percent to $6.7 billion and net income jumping 9 percent to $225 million, or 52 cents per diluted share. The results beat analysts' estimates and marked a strong showing by Amazon in a grim retail environment.

Amazon's post-Christmas announcement that the 2008 holiday season had been its "best ever" had been greeted with a fair amount of skepticism, and many believed Amazon's profits would suffer because of price cutting to lure online shoppers as the economy took a dive. But it appears CEO Jeff Bezos got the last laugh here.

The results are particularly striking given the fate of many brick-and-mortar stores and other online retailers in the recession. Amazon's rival eBay recently posted a sharp drop in sales and profit for the fourth quarter.

Amazon shares shot up more than 12 percent on the news in after hours trading.

"It was a great quarter for them considering how dismal retail was in general," said Dan Geiman, an analyst for Seattle brokerage McAdams Wright Ragen. He said the Q4 results "suggest that they were generally able to hold prices and dictate to some degree their own pricing and weren't necessarily impacted by the environment around them."

Amazon gave guidance for the first quarter of 2009: net sales between $4.525 billion and $4.925 billion (a 9 to 19 percent increase year over year) and operating income of between $125 million and $210 million (a 37% decline to 6% growth year over year). Amazon said the wide range reflects uncertainty about the economy.

Bezos also talked up the Kindle, Amazon's electronic book reader, citing "unusually strong demand" for the device, but he did not give sales figures. The Kindle has been out of stock since before Christmas, and Amazon is expected to roll out the next version of the e-book reader on Feb. 9.

For the full year 2008, Amazon net sales jumped 29 percent to $19.17 billion, and operating income increased 28 percent to $842 million.