Updated from 4:25 p.m. ET to add executive comments from conference call.

NEW YORK (

TheStreet

) --

Amazon

(AMZN) - Get Report

shares plummeted 9.6% to $176 in late trades on Tuesday after missing fourth-quarter revenue expectations because of soaring fulfillment and shipping costs.

The e-commerce giant reported revenue had increased 35% to $17.4 billion, but analysts were hoping for revenue of $18.2 billion. Earnings per share fell to 38 cents from 91 cents a year prior, but came in ahead of analyst forecasts of 19 cents.

Kindle unit sales, which includes both the e-reader and the Fire, also tripled during the holiday season, the company said, but declined to give more specific figures.

Analysts have estimated Kindle Fire sales of up to 6 million units during the holiday season. The Android-powered device, priced at $199, is Amazon's attempt at breaking into the tablet segment dominated by

Apple

(AAPL) - Get Report

.

"We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe," Amazon CEO Jeff Bezos said in a press release.

Investors are paying close attention to Amazon's margins,

as the company invests heavily in new businesses

, warehouses and fulfillment centers.

Amazon reported operating margins of 1.5% during the quarter, down from 3.7% during the same period last year.

The company's return on invested capital -- a way to determine how efficiently the company has allocated its capital to generate returns -- also fell to 22% during the fourth quarter from 34% a year prior.

"There's a lot of interesting opportunities we continue to invest in," said CFO Tom Szkutak during a conference call with analysts, adding the company's investment strategy likely won't change this quarter.

Going forward, Amazon expects net sales between $12.0 billion and $13.4 billion during the first quarter of 2012.

--

Written by Olivia Oran in New York.

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