Amazon's e-book sales beat paperbacks; profit up 8%

Amazon.com (AMZN) is now selling more Kindle e-books than paperbacks, the world's biggest online retailer reported. But Amazon's fourth-quarter financial results were mixed. Amazon says net income for the quarter climbed 8%, which surpasses Wall Street expectations. But revenue fell short, sending shares down nearly 10% at one point in extended trading.

The results reflect the unevenness in the holiday shopping season, as people started to pick up their spending again after the official end of the recession but were choosy about what they bought.

One thing they're choosing: e-books. Amazon says it has sold "millions" of third-generation Kindle electronic readers in the most recent quarter, eclipsing Harry Potter and the Deathly Hallows as the best-selling product in the retailer's history. That's despite fierce competition from Apple's iPad and Barnes & Noble's Nook, among others.

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"Last July, we announced that Kindle books had passed hardcovers and predicted that Kindle would surpass paperbacks in the second quarter of this year," Amazon CEO Jeff Bezos said in a release. "So this milestone has come even sooner than we expected — and it's on top of continued growth in paperback sales." Since the beginning of the year, Amazon says that for every 100 paperbacks it has sold, 115 Kindle books have been sold. Kindle book sales are triple that of hardcovers.

Net income rose 8% to $416 million, or 91 cents per share, topping the estimate of 88 cents per share of analysts polled by FactSet. That compares with $384 million, or 85 cents per share, in the year-ago period. Revenue rose 36% to $12.95 billion. Analysts had expected $13.02 billion.

Shares fell $17.62 to $166.33 in extended trading after the results were posted.

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