Amazon reported strong fourth quarter earnings late Wednesday on strong holiday sales, but issued a conservative forecast sending shares down in after-hours trading.

This quarter showed accelerated sales growth and record operating profits, Jeff Bezos, founder and CEO of Amazon.com, said. In our view, these unusual financial results are driven by one thing: continuously improving the customer experience.

The online retailer reported earrings of $207 million, or 48 cents a share, compared with earnings of $98

million, or 23 cents a share, for the same period the previous year.

Revenue grew 42% to $5.67 billion compared with $3.99 billion the previous year. Analysts had expected revenue of $5.37 billion for the period.

For the first quarter and full 2008 year, the company issued a revenue forecast that was ahead of Wall Street's estimates. The company expects revenue to come in between $3.95 billion and $4.15 billion for the March quarter -- ahead of the $3.92 billion expected by analysts.

For the year, Amazon said revenue is expected to come in between $18.75 billion and $19.75 billion. Analysts had been expecting revenue of $18.2 billion for the year.

However, expectations for operating profits disappointed. The company expects operating income to come in between $785 million and $985 million for the full year. The mid-point of that range - $885 million - is below the $958.4 million in operating income that was expected by analysts for the year.

The shares dropped more than 8% at the close of the regular session, after gaining 26 cents to $74.21 during the day. The stock has already lost nearly 23% of its value since New Year's.

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