Shares were down 4 percent in pre-market trading at 7:32 a.m.in New York Friday.
The company began removing a wide array of products from its India website late on Thursday to comply with the new foreign investment curbs that kick in on February 1, Reuters reported.
The company forecast net sales of between US$56 billion and US$60 billion for the first quarter, missing the analyst average estimate of US$60.77 billion, according to IBES data from Refinitiv.
Historical context. The company has beaten analysts' earnings-per-share estimates five of the last eight fourth-quarter reports, but it has beaten sales estimates only once, a year ago. At the beginning of previous year, eMarketer predicted Amazon would only do $2.8 billion in ad sales.
Amazon's shares, which closed up 2.9 percent, to $1,718.73, fluctuated in after-hours trading - falling by more than 1 percent before rising by almost 3 percent. Amazon Web Services (AWS) marked another round of strong growth, recording revenue up 45% to $7.4 billion, and $2.2 billion in operating income.
In an attempt to partially offset these rising costs, Amazon bumped up the cost of a Prime membership past year for the first time since 2014.More news: Investors cautious ahead of Fed rate decision
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On the other hand, the company should benefit from its rapidly growing advertising business, which is focused on getting retailers to pay for ads within Amazon to improve their online sales. The company has more than 100 million Prime members globally.
Amazon's earnings-per-share came in at $6.04 in Q4, beating average estimates of $5.68.
Chief executive Jeff Bezos highlighted the role of Amazon's digital assistant Alexa as the company moves into infusing artificial intelligence into its smart speakers and other devices in a race for dominance in the "internet of things" market.
"Tens of millions" of customers worldwide started Prime free trials or began paid memberships during the holiday season.
The rising shipping costs demonstrate the larger shift toward online shopping.
Amazon's fourth-quarter sales hit a record $72.4 billion, yielding a $3 billion profit - both surpassing analysts' expectations. Amazon in October pledged to pay all of its warehouse employees at least $15 an hour, while eliminating some bonuses and stock awards. Sales for the full year grew 31 percent to $232.9 billion.
Bezos, the world's wealthiest man and Amazon's biggest shareholder, announced earlier this month that he was divorcing MacKenzie, his wife of 25 years.