Updated from 11:16 a.m. EDT

Shares of Amazon.com ( AMZN) shed over 10% of their value on Friday following the company's disappointing earnings report.

In an overall tough day for stocks, the company's shares closed down $5.80, or 12.7%, to $39.98.

The stock's drop came one day after the e-commerce company missed Wall Street's earnings and revenue forecasts, and offered a disappointing outlook for the third and fourth quarters.

While the company met its own guidance for the second quarter, it fell short of analysts' earnings expectations by a penny a share and their revenue forecast by some $50 million.

In the just-completed quarter, the e-commerce giant earned $76.48 million, or 18 cents a share. That marked the fourth-straight quarterly profit for Amazon and compared favorably with the same period last year, when the company lost $43.31 million, or 11 cents a share.

The company's revenue increased to $1.39 billion from $1.1 billion a year earlier.

Excluding charges, the company would have earned $74.72 million, or 18 cents a share.

While impressive, those results weren't enough to beat the Street's heady expectations .

Analysts polled by Thomson First Call were expecting the company to earn 19 cents a share excluding charges -- 15 cents on a GAAP basis -- on $1.44 billion in sales. Amazon previously forecast that it would earn about 15 cents to 20 cents a share without charges on $1.34 billion to $1.44 billion in sales.

On a conference call with reporters, Amazon CFO Tom Szkutak defended the company's results, noting that Amazon's results came in near the midpoint of its revenue and earnings guidance and ahead of its own forecast for "consolidated operating income," a proprietary metric used by the company that excludes certain charges.

But Szkutak acknowledged that the company again benefited from the decline of the U.S. dollar vs. other major currencies. Had exchange rates remained constant with where they were in the second quarter last year, Amazon would have reported revenue that was $47 million lighter and net income that was $6 million, or 2 cents a share, lower.

Looking forward, Amazon offered revenue guidance that was in line with analysts' predictions. The company expects to post $50 million to $70 million in operating income on sales ranging from $1.425 billion to $1.525 billion in the third quarter. For the full year, Amazon now expects to show operating income of $400 million to $460 million on sales ranging from $6.625 billion to $6.925 billion.

The company's guidance appears to be below the Street's consensus. Amazon does not offer a specific outlook on earnings, but assuming that its interest income and expense remain the same as in this just-completed quarter year and that its share count increases at the same rate it did in the second quarter, the company's operating income guidance implies pro forma earnings per share of about 13 cents to 17 cents a share.

Assuming that Amazon's share count increases at the same rate it did in the first half of this year and that its interest income and expenses are the same in the second half as they were in the first, its full-year guidance implies earnings ranging from about 89 cents a share to $1.03 a share.

For the third quarter, Wall Street is looking for earnings of 20 cents a share on a pro forma basis -- 16 cents a share on a GAAP basis -- on sales of $1.46 billion. For the full year, analysts expect $1.03 per share excluding charges -- 95 cents GAAP-- on sales of $6.82 billion.

On a conference call with company executives, some analysts noted that the company's operating income guidance for the third quarter is significantly below its actual result in the second quarter. Amazon posted $86.23 million in operating income in its just-completed period.

Szkutak attributed the projected operating income decline to several factors. The company continues to lower prices, he noted. At the same time, Amazon continues to hire software engineers and developers to build out its Web sites, he said.

In the meantime, the company is opening a new fulfillment center in Scotland. Though the company will be incurring costs from that facility in terms of new employees and leasing expenses, it doesn't expect to see any items shipped from it until as late as the fourth quarter, Szkutak said.

But potential decline represents another sign of slowing growth at Amazon, a disturbing trend for a company valued at more than 40 times this year's projected earnings. Overall sales grew by 26% in the quarter -- boosted by favorable foreign exchange rates -- compared with 37% revenue growth in the year-ago period.

Pro forma operating income grew by 50% in the quarter. That's an impressive result to be sure, but it's less than a third of the 158% growth in pro forma operating income in the year-ago quarter.

If you liked this article you might like

Short-Circuited

Short-Circuited

SEC Launches Inquiry of Electronic Arts Options

SEC Launches Inquiry of Electronic Arts Options

Apple's iTV Intriguing but Not a Core Business

Apple's iTV Intriguing but Not a Core Business

Street Applauds Adobe Systems

Street Applauds Adobe Systems

Adobe Reaffirms Guidance

Adobe Reaffirms Guidance