Amazon.com's quarterly net income doubled from a year ago and beat Wall Street targets, though much of the gain was related to the sale of European DVD rental assets, confusing some investors.

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[AMZN  Loading...      ()   ] initially jumped more than 8 percent following the results Wednesday, but quickly traded down to below their closing price of $70.54.

The after-hours share weakness may have been a reaction to a $53 million non-cash gain from selling the European DVD rental assets, said analyst Dan Geiman at McAdams Wright Ragen.

"You back out that one-time item and it was pretty much an in-line quarter," Geiman said.

Amazon posted second-quarter net profit of $158 million, or 37 cents per share, compared with $78 million, or 19 cents per share, a year earlier.

Revenue in the quarter, which is seasonally the slowest, rose to $4.06 billion.

Analysts, on average, have been expecting revenue of $3.95 billion, according to Reuters Estimates.

Seattle-based Amazon, which has been lowering prices on many goods to spur purchases during the U.S. economic downturn, reported a rise in operating profit margin to 5.3 percent of total sales from 4.0 percent a year ago.

Three analysts polled by Reuters had expected operating profit margins to range between 3.3 percent and 4.3 percent.

For the third quarter, Amazon said it expects net sales between $4.2 billion to $4.425 billion, representing growth of 29 percent to 36 percent.

Operating income is expected to range between $115 million and $160 million, representing a decline of 6 percent to growth of 31 percent.

That operating income outlook includes some $80 million related to stock-based compensation and amortization of intangible assets.

The company said it now expects 2008 net sales between $19.35 billion to $20.10 billion, versus its previous estimate of $19.1 billion to $20.0 billion.

Wall Street has been expecting net sales of $19.6 billion, on average.

Operating income is now expected to range between $745 million and $920 million from an earlier range of $740 million to $940 million.

Amazon's lowering of the midpoint of its full-year operating income guidance may also have upset investors, Geiman said.

The midpoint of Amazon's new range is $832.5 million, compared with the $840.0 million midpoint previously given.

Valued at 45 times projected 2008 earnings, Amazon shares trade well above many Internet stocks, including Google, as well as brick-and-mortar retailers with big online divisions like Wal-Mart Stores, Target and Best Buy, at 17, 13 and 12 times projected earnings, respectively.

Amazon shares gained nearly 4 percent in regular Wednesday trade.

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