Internet retailer Amazon today reported a 45 percent increase in profits for the second quarter, but fell well short of analysts' expectations as the stock took a beating in after-hours trading.

Amazon (NASDAQ: AMZN) reported net income for the second quarter of $207 million, or $0.45 per share, up 45 percent from the year-earlier period, when it posted net income of $142 million, or $0.32 per share. But analysts polled by Thompson Reuters had been expecting earnings of $0.54 per share. Shares of Amazon were down more than 13 percent in extended trading.

Despite the drubbing investors gave Amazon, the e-commerce giant also reported a major jump in revenue for the quarter, totaling $6.57 billion -- 41 percent above the same period last year and just ahead of analysts' forecast of $6.5 billion.

As a key bellwether for the online e-commerce market, Amazon's quarterly numbers are always a closely scrutinized for signs of industry-wide trouble ahead, or, in this case, the potential for continued rebound as the globe works its way out of recession. For North American e-tailers, the signs appear especially positive.

Amazon said sales in the region are growing more rapidly than the international market. In the second quarter, North America constituted 55 percent of the company's sales, up two percentage points from the year-earlier period.

The Kindle and Amazon's Mobile Future

The Kindle, Amazon's popular e-reading device, remains a chief focus of the company as it continues to add new features and publishing partners. Earlier today, for instance, Amazon announced that it had reached an exclusive deal with publishing firm Wylie to release digital editions of 20 celebrated works of modern literature, including Vladimir Nabokov's "Lolita" and Hunter Thompson's "Fear and Loathing in Las Vegas."

In June, Amazon rolled out a software update for the Kindle that enabled readers to share passages from the device to their social networks on Facebook and Twitter.

Amazon does not release sales figures for the Kindle, but it boasts that the device is the most popular item in its vast marketplace, and says that it is now selling well more digital books than print volumes. The company sold more than three times as many Kindle e-books in the first half of this year than in the first half of 2009.

The company, widely credited for reviving the long-slumping e-reader industry with the Kindle, is now facing heavy competition, both from dedicated reading devices from rivals like Barnes and Noble and Sony, as well as the emerging crop of tablet computers that offer a similar form factor but perform a wider variety of tasks.

Apple's (NASDAQ: AAPL) iPad, in particular, is seen as a competitive threat to the Amazon Kindle, and was widely viewed as a driving factor in the company's decision to drop the price of the e-reader from $259 to $189.

But while the ascendance of the tablet may leave dedicated e-reading devices with an uncertain future, it bodes well for the rest of Amazon's business, according to CEO Jeff Bezos.

In a statement, Bezos said Amazon is "encouraged by what we see in mobile."

"In the last 12 months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device," Bezos said. "The leading mobile commerce device today is the smartphone, but we're excited by the potential of the new category of wireless tablet computers. Over time, tablet computers could become a meaningful additional driver for our business."

Kenneth Corbin is an associate editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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