Amazon's ( AMZN) sales and margins are in focus, as both measures fell short of expectations in the fourth quarter, triggering a massive sell-off in the stock. This marked the third consecutive quarter that Amazon's results were not on par with its tradition of outperformance. While some brokerage firms downgraded the stock on the news, for the most part, analysts sentiment remains bullish, urging investors to pick up shares on the downturn. During the quarter the e-commerce giant earned $416 million, or 91 cents a share, on revenue of $12.95 billion. Analysts were looking for a profit of 88 cents on revenue of $13.01 billion. Margins came in at 3.7%, below Wall Street's forecast of 4.2%, as Amazon amped up its investment in its infrastructure. >Click here to vote for the Best Internet Stock Amazon has been rapidly expanding its fulfillment centers, opened 13 new locations in 2010 with plans to roll out more distribution centers this year. While analysts for the most part still foresee strong growth, shareholders will need to be patient. Amazon said it still expects double-digit margins in the long term, but margins in the first half of the year will most likely be lackluster. Amazon predicts operating profit will be in the range of $260 million to $385 million in the first quarter, with sales as low as $9.1 billion. In comparison, Wall Street is looking for operating profit of $474 million on revenue of $9.36 billion. Once again, Amazon did not disclose sales on its popular Kindle e-reader. But CEO and Founder Jeff Bezos said the device helped push sales above $10 billion for the first quarter ever. "Kindle books have now overtaken paperback books as the most popular format on Amazon.com," Bezos said in a statement. "Last July we announced that Kindle books had passed hardcovers and predicted that Kindle would surpass paperbacks in the second quarter of this year, so this milestone has come even sooner than we expected -- and it's on top of continued growth in paperback sales." During the quarter Amazon purchased Quidsi, which owns and operates Diapers.com and Soap.com. Last week the company also announced it purchased LoveFilms, which is fondly known as the " Netflix ( NFLX) of the U.K." Separately, Bezos shed some of his stake in the company, now owning 19.5% as of Dec. 31 from 21.2%.