Amazon chart

Related TechFlash coverage: Amazon.com acts like a startup, but will Wall Street abide?

Amazon pulled in revenue like crazy in the last three months of 2011, with Kindle tablet sales tripling during the holiday shopping season. But the Seattle e-commerce and tech giant also spent like crazy to fuel its current growth surge. The result: net income was down nearly 60 percent.

Amazon’s fourth quarter earnings results -- released Tuesday afternoon -- show that net sales increased 35 percent to $17.43 billion in the fourth quarter, compared with $12.95 billion in fourth quarter 2010.

Amazon’s fourth-quarter revenue missed the mark estimated by industry analysts on Wall Street. Amazon’s stock fell 8 percent, trading at about $178 a share in after-hours trading Tuesday.

Analysts are expecting to see Amazon’s revenue grow 40 percent, to $18.2 billion for the fourth quarter.

Amazon chart

Operating income was $260 million in the fourth quarter, compared with $474 million in fourth quarter 2010.

Net income decreased 58 percent to $177 million in the fourth quarter, or $0.38 per diluted share. In the fourth quarter of 2010, Amazon’s net income was $416 million, or $0.91 per diluted share.

“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” said CEO Jeff Bezos. “Our millions of third-party sellers had a tremendous holiday season with 65 percent unit growth and now represent 36 percent of total units sold.”

Amazon has been hiring heavily, with much of the beefed-up staffing coming from its expansion of distribution centers. The company ended the year with 56,200 workers, a 67 percent increase from a year ago.

There was a big jump in revenue in Amazon Web Services, which saw revenue increase to $459 million in the fourth quarter, a 62 percent boost.

Overall net sales in the U.S. were up 37 percent.

But one sign of worry: the sale of media (books, music, movies, video games and consoles, software and digital downloads) were up only 8 percent in North America. Media accounts for 37 percent of Amazon’s worldwide revenue, and media is considered an area where the Kindle Fire sales would give a big boost, given the strategy to have Kindle Fire users buy up and download a lot of content.

With Amazon’s strong growth on the revenue side, CFO Thomas Szkutak said the company still feels like there is a giant upside down the line in spending now on content, services and devices.

“That is why we have invested the way we have and why we are continuing to invest in the business,” Szkutak told industry analysts in an earnings conference call Tuesday.

A big expense has been Amazon’s rapid addition of distribution centers. Amazon added 17 in 2011, bring the total warehouse count to 69.

Amazon chart

Szkutak said Amazon plans to continue opening centers, but did not say how many.

Amazon, sticking to its nature of not revealing details of product or service sales, did not say how many Kindle Fire tablets it sold during the last quarter. Analysts have estimated it was 6 million.

For the full year, Amazon said net income decreased 45 percent to $631 million in 2011, or $1.37 per diluted share, compared with net income of $1.15 billion, or $2.53 per diluted share, in 2010.

For the first quarter of 2012, Amazon forecast net sales to be between $12 billion and $13.4 billion, or to grow between 22 percent and 36 percent compared with first quarter 2011.

Amazon says it expects operating income for the first quarter to range from a loss of $200 million to a gain of $100 million.