Amazon Bridges Troubled Waters

For example, the company's retail unit for those items, dubbed Endless, recently announced a $5 rebate offer along with free overnight shipping.

"That's just another part of their strategy to expand into new markets, and they are willing to invest to build a position in what they think are attractive markets," says Robert Toomey, an analyst at EK Riley Advisors. "This is a company that very much thinks in the long term."

Toomey, whose firm has no business relationship with Amazon but who is long shares of the company, expects EPS of 25 cents on revenue of $3.8 billion for the fourth quarter.

He believes investors will see the returns from Amazon's investment in technology start to materialize in early 2007.

Toomey also expects the company's closely scrutinized operating margins to continue edging upward from 5.5% in the third quarter to 5.8% this quarter.

Aside from Amazon's bread-and-butter retail business, investors will also be looking to hear about progress in some of the company's more novel initiatives.