Amazon swings to loss but revenues rise

The online retail giant, which has been aggressively expanding its footprint and digital content offerings while promoting its Kindle line of tablets, had been expected to post a modest profit for the second quarter.

"We're so grateful to our customers for their response to Kindle devices and our digital ecosystem," said Jeff Bezos, founder and chief executive.

"This past quarter, our top 10 selling items worldwide were all digital products -- Kindles, Kindle Fire HDs, accessories and digital content," he said.

"The Kindle Store now offers millions of titles including more than 350,000 exclusives that you won't find anywhere else. Prime Instant Video has surpassed 40,000 titles."

Amazon has slashed prices of its Kindle HD tablets to as low as $169 in the US and 139 pounds in Britain, amid an intense price war in the tablet market.

The loss translated to two cents a share, while analysts had been expecting a profit of five cents per share.

Amazon stock dropped 0.3 percent to $302.50 in after-hours trading.

Amazon, which upgraded and expanded its Kindle line last year, has been adding more content like films, TV shows and music to its offerings as part of its effort to keep pace with rivals like Apple and Google.

It recently announced a deal with Viacom to bring hundreds of TV shows to Amazon video, including Dora the Explorer and SpongeBob SquarePants, and is producing more of its original television shows.