NEW YORK (CNNMoney.com) -- Amazon.com posted first-quarter earnings Thursday that topped Wall Street's expectations, but the online retailer's outlook was less rosy.
Amazon reported a profit of $299 million in the first quarter, up 68% from a year ago. Earnings per share totaled 66 cents, compared with 41 cents in the same quarter last year.
Sales rose 46% to $7.13 billion from a year ago.
Analysts polled by Thomson Reuters were looking for earnings of 61 cents on sales of $6.87 billion.
For the second quarter, Amazon said it expects sales between $6.1 billion and $6.7 billion. Analysts forecast second-quarter revenue of $6.4 billion.
After the release of the company's results, shares of Amazon (AMZN, Fortune 500) fell nearly 6% in after-hours trading.
Investors were spooked by the outlook, said Sameet Sinha, a senior analyst at JMP Securities.
"[The forecast] is implying some sort of slowdown in growth," said Sameet Sinha, senior analyst at JMP Securities. "It seems that they're being conservative about revenues from Kindle because of the competition from the iPad."
Amazon's electronic e-reader, the Kindle, is the company's best selling product. But with Apple's (AAPL, Fortune 500) recent release of the iPad, which also sells electronic books, Amazon is going to have to step up its game.
And since Amazon was forced by publishers to raise the costs of its e-books, it can no longer use the promise of lower prices to attract customers and gain a competitive edge. But the company is ramping up its book count, said CFO Thomas Szkutak on a call with investors
"One of the things that we're doing is we're expanding our selection pretty dramatically," said Szkutak when asked how Amazon plans to differentiate its product.
Szkutak added that the Kindle had 90,000 titles when it launched and now has more than 500,000.
Amazon also boosted its advertising to promote the Kindle, which Sinha said was likely due to the introduction of the iPad as well. Spending on marketing climbed 57% in the first quarter.
While Amazon doesn't break down revenue from the Kindle, sales grew during the quarter and demand remains strong, Szkutak said.
The company's first quarter results also reflect the performance of online shoe and apparel store Zappos, which the company bought in November of last year. Szkutak said Zappos experienced positive growth in the quarter but didn't disclose its sales.
HSBC banker arrested at JFK airport as he prepared to leave the country. He and former trader face federal charges they manipulated currency trades. More
Bernie Sanders takes credit for forcing for forcing Hillary Clinton and the entire Democratic Party to get a lot tougher on Wall Street. But how likely is that to happen? More
A cutting-edge Chinese tech firm that you've probably never heard of just snapped up top U.S. electronics maker Vizio for $2 billion. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Only 3% of employers offer so-called "vacation stipends" that help pay for their employees' vacations. But those that do make taking time off a must. More