Updated from 9:17 a.m. ESTOverstock.com ( OSTK), the online closeout retailer, found profitability in its fourth-quarter, but said that gross margins were unlikely to rise above 15% and that any future savings would not be passed on to investors. The stock was down $9.89, or 15%, to $56.05 Friday morning. Overstock closed Thursday at $65.94. The company posted a profit of $2.48 million, or 12 cents a share, and saw revenue rise 80% to $221.3 million in the quarter from the year-ago quarter. Analysts had been forecasting a profit of 5 cents a share on revenue of $212 million, according to Thomson First Call. For the full year, Overstock.com's revenue rose 107% to $494.6 million for a loss of $5 million, or 29 cents a share. That compared with a 2003 loss of 75 cents a share. Analysts had been calling for a loss of 37 cents a share and revenue of $486 million. Patrick Byrne, the charismatic Overstock CEO with a flair for biblical metaphors, said in a chatty letter to shareholders that was issued by way of an earnings release, "For several quarters my letters and conference calls have described at length our internal work building an Ark: the waters came, and our ark floated magnificently," Byrne wrote. "We made $2.5 million in Q4. That is a nice, nearly forgotten feeling. We lost $5.0 million in GAAP net income in 2004. I apologize for that, he wrote." Byrne noted that gross margins had risen steadily over the past year to 15.2% in the fourth quarter of 2004 from 9.6% in the year-ago quarter. But he warned that any future savings from lower logistics costs would not go to investors but go into undercutting rival Amazon.com ( AMZN) on price.