Wall Street expects AWS to generate fourth-quarter revenue of $7.2 billion.
Shares of the company fell 1.7 per cent to US$1,690 after the bell.
He said: "Alexa was very busy during her holiday season".
Amazon's rising shipping costs reflect its push to get products to customers at a faster and faster clip, along with the increasing popularity of Amazon Prime and its core benefit of free two-day shipping. And advertising continued to be one of the brightest spots for the company, with $3.4 billion posted in its "other" category, which is mostly attributed to ad sales, marking an increase of 95 percent year over year.
Yet investors focused their attention on Amazon's worldwide operation, where the company has long lost money in the hopes of future profit.
Long known for slim margins, the company has been boosting its profitability in recent years and the latest results showed strong sales for the holiday season.
"Right now we are working through some next issues in both cities", Chief Financial Officer Brian Olsavsky said on the call.
"I'm guessing a lot of people expected really good results, and as soon as they saw them sold and took the profit", said independent analyst Rob Enderle.
However, growth is slowing down.
A worker sorts parcels at Amazon's fulfilment centre in Peterborough, Britain November 15, 2017.
The company said that for the first quarter of 2019, net sales are expected to fall between US$56 billion and US$60 billion - though some analysts had set their sights on almost $61 billion.
"That's wildly concerning", said Tom Forte, an analyst at DA Davidson & Co.
"If they are stepping on the accelerator, that means they like what they're seeing, and it's worthy of more investment", he said. This compares to the year-ago quarter when earnings came to $2.16 per share on revenue of $60.45 billion. Sales at Amazon Web Services, the top seller of cloud-computing services, climbed 45 per cent to US$7.43 billion.
Looking ahead to the first quarter of its 2019 fiscal year, Amazon projected revenue of $56 billion to $60 billion, for growth of 10% to 18%, which includes 210 basis points in foreign currency headwinds; it anticipates operating income of $2.3 billion to $3.3 billion, up from $1.9 billion in the previous year.
Neil Saunders, analyst at research firm GlobalData, said competitors' gains had hurt the growth of Amazon's retail division.
In the three months to the end of the year, which included the crucial Christmas period, profit rose 63% to $3bn (£2.2bn) while revenue was up 20% to $72.4bn.
This expansive customer base has lured merchants to sell goods on the company's marketplace, to the point where more than half of products sold on Amazon came from third parties earlier a year ago.
FILE PHOTO: The logo of Amazon is pictured inside the company's office in Bengaluru, India, April 20, 2018.