Williams-Sonoma ( WSM) beat analysts' fourth-quarter estimates and offered better-than-expected guidance, but the company still gave fodder for skeptics. Three of the company's smaller, newer divisions posted disappointing results, leading Williams-Sonoma to cut back on expansion plans. Meanwhile, the company plans to continue a dicey strategy, which has been successful so far, of bulking up its inventories. "I think there's still a lot of risk there," said Rob Wilson, who covers the company for Tiburon Research Group. Tiburon does not do investment banking and Wilson has no position in Williams-Sonoma shares. Investors seemed to have their own doubts about Williams-Somoma. Despite the company's generally upbeat report, Williams-Sonoma shares were recently off 9 cents, or 0.2%, to $32.72. Overall, the retailer of kitchen and home living products posted a strong quarter. The company's earning per share jumped 27% over the fourth quarter of 2002 on 16.9% sales growth. In the quarter, the company earned $102.12 million, or 85 cents a share, on $1 billion in sales. In the year-earlier period, the company earned $79.77 million, or 67 cents a share, on sales of $858.96 million. Analysts polled by Thomson First Call were expecting earnings of 84 cents a share. Likewise, the company offered encouraging guidance for the first quarter and for 2004. Williams-Sonoma said it expects earnings of 15 cents to 16 cents a share in the current quarter on sales ranging from $627 million to $639 million. For the full year, the company forecast earnings ranging from $1.52 to $1.56 a share on sales ranging from $.3.10 to $3.173 billion. The consensus estimate among analysts was that the company would earn 14 cents a share in first quarter and $1.53 a share for the year on $3.15 billion in sales.