Blue Nile, Inc. posted a strong rise in fourth quarter net sales, rising 20 percent to $102.9 million. Annual results were less celebratory, nearly flat at $302.1 million, an increase of 2.3 percent over fiscal 2008.

The leading online U.S. diamond retailer reported that on a comparable 13-week to 13-week basis, fourth quarter net sales increased 27.4 percent year-over-year.

Net income for the fourth quarter totaled $5.4 million, an increase of 54.6 percent over the fourth quarter of 2008. Operating income rose 55 percent to $8.2 million.

For the full year, Blue Nile reported that net income increased 10.1 percent to $12.8 million. Operating income rose 21 percent to $19.3 million.

Blue Nile’s international sales are quickly growing, but still represent only about 11 percent of total net sales. For the fourth quarter, international sales grew 69.6 percent to a record $11.7 million. Excluding the impact from changes in foreign exchange rates, international sales increased 59.4 percent. For the full year, international sales totaled $33.2 million, a 19.9 percent increase compared to sales of $27.7 million for fiscal year 2008. Excluding the impact from changes in foreign exchange rates, international sales increased 27.4 percent for the fiscal year.

“Blue Nile delivered excellent fourth quarter results with strong sales and earnings growth,” said CEO Diane Irvine.

Wall Street, however, felt differently, responding by selling big chunks of Blue Nile stock on Friday, a day after the results were published.

“For the first quarter we expect to generate net sales between $71.5 million and $75 million,” said Chief Financial Officer Marc Stolzman. In the first quarter of 2009, the retailer reported net sales of $62.4 million.