Blue Nile reports 14 percent rise in Q4 profit, but Q1 projections disappoint

Online diamond retailer Blue Nile Inc. posted a 14 percent rise in fourth-quarter profit with its best-ever holiday sales season, but its shares fell sharply after the firm issued a weak outlook for the first quarter.

Blue Nile reported a net profit of $6.2 million, or 41 cents a share, up from $5.4 million, or 35 cents a share, from the same period of 2009, while net sales increased by 12 percent to $114.8 million.

In November, Blue Nile forecast higher net profit of 41 to 46 cents on revenues of $106 million to $115 million.

Meanwhile, Blue Nile reported that international sales shot up 31 percent to a record $15.3 million in the fourth quarter, while gross margins widened slightly to 22 percent from 21.7 percent.

The company upset investors after it forecast first-quarter profit of 14 to 16 cents per share on revenues of $76 million-$78.5 million. A survey of analysts polled by Thomson Reuters looked for a profit of 20 cents on revenues of $80 million.

Blue Nile CEO Diane Irvine said the online retailer was in a good position to take advantage of “significant growth opportunities” in the United States and overseas.

Blue Nile also forecast that net profit and earnings would be in the double-digit area for the full year, in line with analysts’ expectations.