Amazon first-quarter sales forecast misses estimates, shares down

(Reuters) - Amazon.com Inc on Thursday forecast first-quarter sales below Wall Street estimates, even as sales for the holiday quarter hit a record and rose 20 percent.

Shares of the company fell 1.7 percent to $1,690 after the bell.

Amazon began removing a wide array of products from its India website late on Thursday to comply with the new foreign investment curbs that kick in on Feb. 1. These rules disallow companies from selling products via vendors in which they have an equity interest.

Amazon Chief Financial Officer Brian Olsavsky said on a call with reporters that the situation in India is "a bit fluid right now" but remains a good long-term opportunity.

For years, investors have given Amazon a green light to sink money into new endeavors: warehouses and data centers around the world, a studio near Hollywood, research on artificial intelligence. Through these bets, Amazon has lured people to shop online and enterprises to ditch their hardware for the cloud.

Though the company is still marching ahead, challenges have arisen, particularly in markets outside the United states.

The company forecast net sales of between $56 billion and $60 billion for the first quarter, missing the analyst average estimate of $60.77 billion, according to IBES data from Refinitiv.

Analysts have also noted that sales growth slowed down in some European markets during the crucial holiday quarter.

Overall, net sales for the fourth quarter rose 19.7 percent to $72.38 billion and beat the analyst average estimate of $71.87 billion on the back of a strong holiday season, which includes the major U.S. shopping event Black Friday.

Net sales in North America, its biggest market, jumped 18.3 percent to $44.12 billion in the reported quarter. International revenue came in a touch above expectations, too.

Amazon said tens of millions of shoppers signed up for Prime during the season, helping boost revenue from subscription fees 25 percent to $4.0 billion. The company has more than 100 million Prime members globally.

This expansive customer base has lured merchants to sell goods on the company's marketplace, to the point where more than half of goods sold on Amazon came from third parties earlier last year.

Amazon takes a lucrative cut of these sales, which grows when merchants pay the company to handle their shipping, as many do.

Making Amazon more profitable still are ad sales. The company now ranks alongside Alphabet Inc's Google and Facebook Inc as titans in marketing, letting these same merchants pay for high placement in Amazon's search results.

Ad sales and "other" revenue jumped 95 percent to $3.4 billion in the fourth quarter.

Amazon's net income rose to $3.03 billion, or $6.04 per share, in the quarter ended Dec.31 from $1.86 billion, or $3.75 per share, a year earlier, which included a tax gain.

(Reporting by Arjun Panchadar in Bengaluru and Jeffrey Dastin in San Francisco; Editing by Arun Koyyur and Lisa Shumaker)