Amazon, the bookseller-turned-cloud computing giant, continues to show how its most profitable division, Amazon Web Services, has room to grow. However, a vast majority of the company's sales are generated through its online retail business, which came in short of Wall Street expectations for the holiday quarter at a time when Amazon is expected to post its biggest and best numbers of the year. The most costly culprit appears to be Amazon's rising shipping and delivery costs — something the increasing number of Amazon Prime members don't pay a cent for.

Amazon posted fiscal fourth-quarter earnings today, reporting net revenue of $35.7 billion and net income of $482 million, or $1.00 a share. That means revenue grew 22 percent compared with the same period last year, while profit grew 125 percent from the year-ago quarter. AWS reported a 71 percent jump in revenue to $2.4 billion and a 186 percent rise in profit to $687 million.

Those are some impressive numbers, but Wall Street wanted more. Analysts surveyed by Thompson Reuters had Amazon at a profit of $1.56 a share on revenue of $36 billion. Investors are not happy. The company's stock was up 8.9 percent to $635 a share at close today, and investors have sent it tumbling more than 13 percent in after-hours trading. Amazon stock has more than doubled in value over the last 12 months, but only on the promise of more stability in the company's efforts to turn sales into profits.

Of course, Amazon's performance has only continued to improve over the years, making Wall Street's response a bit of an overreaction. The company posted a mammoth $437 million loss back in the third quarter of 2014, a stumble driven in part by weak sales of its Fire Phone. Since then, Amazon's net income has only stumbled once, to the tune of a $57 million loss in the first fiscal quarter of 2015. For instance, this past quarter was the company's largest ever for sales, and net income was better than the past 17 quarters combined.

It's also worth noting how AWS met expectations. Amazon has proved time and again that the razor-thin margins of its online retail business are not where it intends to make money. By leasing computing power to companies as large as Netflix and Spotify, Amazon has emerged as the central rival to Microsoft's Azure platform in the cloud computing space. The margins for AWS have jumped from 17 percent in the first quarter of 2015 to 29 percent this past quarter, and AWS now generates nearly as much profit as Amazon's entire North American e-commerce division.

Ultimately, Wall Street may have gotten too excited over Amazon's recent string of financial hits and set the bar unrealistically high. One pain point for the company is its rising fulfillment costs, which grew more than 37 percent to $1.8 billion this past quarter. The jump is in part a byproduct of the company's more aggressive shipping and delivery initiatives, like its Prime Now one-hour delivery service. Meanwhile, Prime memberships are up 47 percent in the US, and 51 percent worldwide.

CEO Jeff Bezos doesn't seem too phased by his company's performance, despite how badly is net worth is being trimmed at the moment. "Twenty years ago, I was driving the packages to the post office myself and hoping we might one day afford a forklift. This year, we pass $100 billion in annual sales and serve 300 million customers," he said in a statement. "And still, measured by the dynamism we see everywhere in the marketplace and by the ever-expanding opportunities we see to invent on behalf of customers, it feels every bit like day one."