SEATTLE - Amazon's fourth-quarter net income dropped sharply, weighed down by higher operating expenses even as the online retailer's revenue grew.

Amazon.com Inc. said Tuesday that its net income was $177 million, or 38 cents per share, in the three months that ended Dec. 31. That's down from $416 million, or 91 cents per share, a year earlier.

Revenue grew 35 per cent to $17.4 billion, below Wall Street's expectations of $18.3 billion, according to FactSet.

Amazon's operating expenses grew 38 per cent, to $17.2 billion. The company has been investing heavily in new sales fulfilmentcentres so it can grow its business.

For the current quarter, Amazon is forecasting $12 billion to $13.4 billion in revenue. Analysts are expecting $13.4 billion.