Today, Amazon [NASDAQ:AMZN] announced their earnings for the fourth quarter of 2013 as well as the full year of 2013. They reported revenues of $25.59 billion in the 4Q13, up 20% compared with $21.27 billion in the same quarter a year ago. Excluding the $258 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 22% compared with fourth quarter 2012.

For 4Q 2013, Amazon’s reported $239 million profit, $0.51 EPS, compared to the same quarter a year ago’s profit of $97 million, or $0.21 EPS. Analysts were hoping for an EPS of $0.66, according to Thomson Reuters. Sales rose to $25.59 billion from $21.3 billion as stated above, however, Amazon in October had estimated sales would range between $23.5 billion to $26.5 billion. Analysts were expecting $26.1 billion. So, Amazon missed on both revenue and earnings per share, which resulted in Amazon’s shares dropping. Amazon was trading up 4.9% during regular trading and was down as much as 10% in after hours trading and has since moderated to being down only 3%.

Currently, Amazon’s strategy is to grow as much as they possibly can without losing money but continuing to grow their market share, overall network size. Amazon’s relatively small profits based on their immense revenues have been given a pass by many investors thanks to Bezos’ coaching of investors telling them that Amazon’s plans are for long term profitability. Although, it seems as though some investors are getting impatient with Bezos’ strategy even though their fourth quarter clearly accounted for the largest revenues in the company’s history.

For the year of 2013 as a whole, Amazon reported revenues of $74.45 billion, a net increase of 22% over 2012′s $61.09 billion. If you exclude Amazon’s $1.28 billion hit in terms of foreign exchange differences, the company actually reported growth of 24% over 2012. The fact that Amazon was affected by forex to the tune of $1.28 billion is quite astounding as it directly affects their earnings, which for 2013 were fairly weak relative to their growth in revenue, but not unexpected. For 2013, Amazon reported profit of $274 million, or an EPS of $0.59 compared to a net loss of $39 million in 2012, or a net loss of $0.09 per share.

Taking Amazon’s fourth quarter of 2013 into the full year’s figures it is clear that the company’s profitability in 2013 was almost entirely driven by the fourth quarter’s $258 million profit. The fourth quarter of 2013 accounted for over 94% of the company’s profitability in 2013, which basically means that the first, second and third quarters were basically a wash. Which explains why Amazon’s projections for the first quarter of 2013 represent not much of surprise with earnings expectations to lie between a loss of $200 million and a gain of $200 million, meaning that Amazon pretty much expects to break even or slight profit like they did last year. Amazon will need to start to spell out when they expect their margins to improve because right now their razor thin margins are like playing with a very sharp blade, one day you’ll get hurt badly if you play with razor sharp margins.

There is also talk that Amazon may raise their prices for Amazon Prime in order to help pay for shipping costs as well as implement Kindle tablets as payment platforms in order to increase their revenue and profitability further. Obviously, there are no official announcements of either quite yet, but we’ll keep watching Amazon to see how they adjust to this quarter’s earnings.