Updated from 4:16 p.m. EST to provide executive comments from conference call in the third and fourth paragraphs.
NEW YORK ( TheStreet) -- Amazon (AMZN - Get Report) shares fell 5% to $260.85 after the online retail giant posted net income that beat Wall Street expectations, but noted unit growth continued to go in the wrong direction.
In its fiscal first quarter, Amazon earned 18 cents a share on $16.07 billion in revenue, a year-over-year increase of 22%. Analysts polled by Thomson Reuters were looking for 8 cents a share on $16.14 billion in sales. Analysts polled by Estimize were looking for 16 cents a share on $16.4 billion in sales.
For the quarter, Amazon said unit growth was 30% year-over-year, which slowed by 200 basis points from the last quarter, albeit a slower rate than in previous quarters. Unit growth has continued to slow, with digital seeing faster growth than physical, but it's slowing nonetheless. On the conference call, Amazon said the overall growth rate is being helped by the ecosystem which is built more in North America.Amazon also said its "very pleased" with its Kindle and digital business. The ecosystem continues to grow, and those results are being seen in the media revenue, which was up 14% year-over-year. The Kindle Paperwhite is the best selling product worldwide, but the company did not give any sales figures on the call. For the second-quarter, Amazon expects revenue between $14.5 billion and $16.2 billion, a growth of 13% to 26% compared with second quarter of 2012. Operating income (loss) is expected to be between $(340) million and $10 million. Analysts polled by Thomson Reuters expect sales of $15.9 billion in the second quarter, earning 21 cents a share. Shares of Amazon closed the regular session up 2.2% to finish at $274.70. -- Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia