Amazon.com Inc. (AMZN) said Thursday its quarterly net profit fell in its critical holiday-oriented fourth quarter, and revenue missed Wall Street expectations, sending shares down 12 percent.

The online retailer said quarterly net income was $199 million, or 47 cents per share, compared with $346.7 million, or 82 cents per share, in the year-ago period. Sales rose to $2.98 billion from $2.54 billion a year earlier.

Sales missed analysts' targets of $3.08 billion.

Amazon also forecast first-quarter revenue of $2.14 billion to $2.29 billion, while Wall Street on average had expected $2.28 billion.

"I'd say it's disappointing because it's continuing to show a revenue deceleration in terms of the 2006 guidance that they're giving. Their guidance is somewhere between 16 and 23 percent revenue growth. Their range they are giving is more towards the low end of the Street estimates that are currently out there," said analyst Martin Pyykkonen of Hoefer & Arnett.

Many on Wall Street have been concerned that Amazon.com's operating margins would be unduly strained by shipping program Amazon Prime, which charges $79 annually for unlimited two-day shipping. The Seattle, Washington-based retailer, the second-most popular Web commerce site behind eBay Inc. (EBAY), also faces increasing competition from the online sites of brick-and-mortar retailers like Wal-Mart Stores Inc. (WMT) and Target Corp (TGT).

Shares of Amazon, which closed on Nasdaq at $43.98 on Wednesday, are down about 11 percent since hitting a 52-week high in December of $49.50. Shares trade at 59 times estimated 2006 earnings and are valued more in line with Internet stocks than retail. Amazon's price-to-earnings ratio is over triple that of the Standard & Poor's Retailing Index and the S&P Consumer Discretionary 25 .

EBay and Target, by comparison, trade at 42 times and more than 20 times estimated 2006 earnings per share, respectively.

Shares fell to $38.90 in after-hours trade on Inet after closing at $42.74 on Nasdaq.