NEW YORK ( TheStreet) - Amazon ( AMZN - Get Report) reports fourth-quarter earnings Tuesday, and while seemingly everyone (I use that loosely) bought something from the world's largest online retailer during the holiday shopping season, once again it all comes down to whether Amazon can actually make money selling knick-knacks and do-dads.

In the fourth quarter of 2011, Amazon had razor thin operating margins of 1.5%. But many would like to see Amazon start to capitalize on the all spending it has done in recent years as it expands its footprint, adding several new warehouses and capacity around the world.

Analysts polled by Thomson Reuters expect the Seattle-based retailer to earn 28 cents a share on $22.26 billion in revenue, in the fourth quarter. That's up from 2011, when Amazon earned 38 cents a share on $17.43 billion in sales.

Results from eBay ( EBAY - Get Report) and Google ( GOOG - Get Report) Shopping should provide a boost to Amazon's results, said J.P. Morgan Internet analyst Doug Anmuth, who rated Amazon overweight with a $245 price target.

"We remain positive on Amazon driven by continued share gains and top-line growth, though we believe extremely positive sentiment heading into earnings likely leaves less margin for error in the near term," Anmuth wrote in his note.

Even though the holiday shopping screams Amazon, not all is rosy. ChannelAdvisor noted that Amazon's same-store sales decelerated, even though they are more than double the e-commerce growth rate.

"According to ChannelAdvisor, Amazon same-store sales increased 38.5% y/y in 4Q, a slight deceleration from 40.4% y/y in 3Q, though we note that 4Q's growth rate is still more than double the overall e-commerce growth rate," notes Raymond James analyst Aaron Kessler.

Amazon is notorious for cutting prices on everything it sells, including Amazon Web Services (AWS), hardware (Kindle Fire) and software, so any improvement in margins will be an important metric to watch.

Guidance is also another key to the quarter. Amazon is famous for doing what Apple ( AAPL) used to do -- lowering expectations, then crushing them. Anmuth is looking for $16.93 billion in revenue for the first quarter, but believes Amazon could give a range of $15.3 billion to $17.3 billion, with consolidated operating segment income margin showing continued investments as the company expands its fulfillment and moves into new products.

While Amazon doesn't release Kindle Fire sales, any commentary about the device will be key, as investors look to hear more about Amazon's mobile strategy. CEO Jeff Bezos said in a recent interview that Amazon is selling the devices at break-even, but the general thought is that the devices are a gateway to bring more consumers into Amazon's ecosystem, and get them to buy goods from Amazon and its third-party sellers, where the margins are significantly higher.

Bezos continues to spend the company's cash, as he believes it will help the business long-term. It's hard to argue with that strategy, given the share price performance over the past five years. Amazon shares have gained 247.71%, versus a 34.5% return for the Nasdaq.

We'll find out soon enough how much (if any) cash Amazon kept this quarter for Bezos to continue reinvesting in the company.

-- Written by Chris Ciaccia in New York

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