A new earnings preview for Amazon.com predicts the online retail giant will feel the impact of the economy after it lowered prices to keep web traffic flowing.

Analyst Dan Geiman of McAdams Wright Ragen said "in a quarter in which deteriorating economic conditions are likely to have had a more pronounced impact on AMZN’s results," he expects the company to report fourth-quarter earnings of 42 cents per share, down from 48 cents a share in the same quarter a year ago.

Amazon is due to report fourth-quarter earnings Thursday, Jan. 29, after the markets close.

Geiman had earlier estimated earnings of 46 cents per share for fourth-quarter 2008. The current Street consensus is 39 cents per share.

Geiman expects fourth-quarter revenue of $6.58 billion, a 16 percent year-over-year increase. Geiman had earlier estimated revenue of $6.69 billion, but revised that down to account for the "deteriorating operating environment and foreign exchange headwinds."

Here's a passage from the earnings preview:

We expect that AMZN’s gross margin was negatively impacted by the widely promotional environment within the retail sector during the holiday season. Although the company continuously lowers prices -- reflected in its ongoing margin deterioration -- we expect that the impact was greater than usual in the fourth quarter as AMZN adjusted its own pricing in order to preserve its traffic counts.

Geiman said he expects Amazon management to provide updates on its initiatives including web services and digital offerings, and adds: "If the company provides 2009 guidance -- and we’re not sure that it will -- we believe it’s likely to be relatively conservative."