Net income in the three months to June 30 came to just $7 million, or a penny per share, a drop of 96 percent from $191 million, or 41 cents, a year ago.
That matched expectations of analysts polled by FactSet, although Amazon said its profit was hurt by a $65 million loss related to its acquisition of Kiva Systems Inc., a warehouse technology company that Amazon agreed to buy in March for $775 million in cash.
Revenue grew 29 percent to $12.83 billion, short of the $12.90 billion expected by analysts.
However, Amazon said that revenue was negatively impacted by currency movements to the tune of $272 million.
After initially falling, shares rose $3.04, or 1.4 percent, to $223.05 in extended trading following the release of results.
Sales of digital goods like Kindle e-books, music and movies rose 13 percent to $4.12 billion while sales of electronics and other items rose 38 percent to $8.16 billion.
The Seattle-based company said it expects third-quarter revenue to grow between 19 percent and 31 percent from a year ago. That amounts to sales of $12.9 billion to $14.3 billion. The midpoint is short of the $14.1 billion expected by analysts.
It also forecast a third-quarter operating loss of $50 million to $350 million.
Chief Financial Officer Tom Szkutak said the projected loss was due in part to investment in the company's fulfillment centers ahead of the all-important holiday quarter.
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