Check out the drop in Amazon’s operating margin and what it did to the stock.
 
The world’s largest online retailer posts earnings that beat analysts expectations and forecast higher fourth-quarter revenue than many analysts expect. And still its stock was down more than 9 percent in premarket trading on Wednesday morning.
 
The culprit? Lofty expectations that were dampened by a drop in margins. Operating margin fell to 3.8 percent of global sales from 4 percent in the previous quarter.
 
Amazon had been trading at about 59 times projected earnings, well above the multiples for online auction site eBay (22 times) and Wal-Mart, the world’s largest retailer (13 times).
 
Global Crown Capital analyst Martin Pykkonen said the stock was still trading at twice Google’s multiple of estimated 2008 earnings.                 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  Â 
“That’s priced to perfection and you’re not getting perfection here,” he said.
 
Also in the basket:
 
Talbot’s sees loss in second half on weak sales
 
Coca-Cola Enterprises profit in-line with estimates
 
Ethan Allen Posts higher profit, sales
 
P.F. Chang’s third-quarter earnings drop

Wrigley third-quarter profit up on Europe, Asia