"I am especially pleased with the job our US books team has been doing," said Amazon chief executive officer Jeff Bezos during a conference call yesterday, noting the book unit's 20% year-on-year growth.
The company reported a net loss of $94m (£60.16m) for the quarter ended 30 June, or 25 cents per share, compared with a net loss of $168m, or 47 cents per share for the same period last year.
Second-quarter revenue came in at $806m, compared with $668m during the same quarter last year, representing a 21% increase.
The company posted a pro forma loss of $4m, or 1 cent per share. Analysts surveyed by Thomson Financial/First Call predicted a pro forma loss of 6 cents per share.
Third-party transactions and international sales also helped boost the company's quarterly sales, Bezos said. The number of transactions completed by third-party companies and individuals on Amazon.com grew 20% in North American units and represented 35% of sales in that region.
Sales from Amazon's German, UK, French and Japanese sites grew 70% during the quarter to $218m.
The company also raised expectations for its full-year results yesterday, saying that it expects to see benefits from increased productivity and reduced costs. Amazon also said it expects net sales to grow 18%.
The Internet pioneer reported its first net profit for the fourth quarter of last year, and then slid back into the red the following quarter.
Riding high from its fourth-quarter 2001 profit, the company permanently extended a free shipping offer it began during the holiday season, but soon faced stiff competition from a handful of rivals who jumped on the free shipping bandwagon.
Buy.com began offering free shipping on certain orders and then promised to undercut Amazon's book prices by 10%. Although it is difficult to say how competitive efforts like these have affected Amazon, the company has made moves recently to broaden its business.
Amazon recently began beta-testing a feature that displays mail-order catalogues and restaurant menus on its site.
Earlier this month, the company unveiled Web services allowing Web site developers and owners to build applications and tools so that they can incorporate Amazon's offerings into their sites.
However, Amazon is staying committed to offering price reductions and free shipping offers, according to Bezos, and plans to continue slashing prices later this year.
"Price reductions are a big deal for customers but have a short-term impact on us," Bezos said. However, he added that the second-quarter results show that lower prices are working for Amazon over the long term.
Shares in Amazon dipped 6% to close at $14.57 before the second-quarter results were released yesterday.