Harry Potter casts a mean spell, but even he may not be able to wow Amazon.com ( AMZN) investors this quarter. The limits of the teen wizard's strength will be on display Tuesday afternoon as the world's largest Internet retailer posts quarterly earnings. Sales of Scholastic's ( SCHL) latest Potter title, Harry Potter and the Half-Blood Prince, should help boost Amazon's revenue by 26% from a year ago to $1.86 billion, analysts expect. But his effect on the bottom line is expected to be less enthralling -- analysts surveyed by Thomson First Call see third-quarter profit dropping to 10 cents a share from 17 cents a year ago -- and that's part of why Amazon has receded a bit lately from Wall Street's view. Amazon faces increasing competition for customers as the stream of new online users is starting to dwindle. Investors will be looking for signs of pressure on the company's profit margin, which has been in the spotlight as Amazon spends more on marketing and incentives such as free shipping, as well as rising fulfillment costs. "While we expect Harry Potter book sales to contribute $44
million -$45 million to the top line, they are sold at a lower margin," said JP Morgan analyst Imran Khan, who rates Amazon as neutral, in a note to clients. "Additionally, we expect increased fuel prices may have an approximately $10 million negative impact on the quarter." When certain costs are excluded, Amazon should make about 25 cents a share, compared with 17 cents a year earlier, said McAdams Wright Ragen analyst Dan Geiman in a note. Geiman, who has a buy rating on Amazon shares, estimates that 1.5 million preordered copies of the Harry Potter book shipped during the quarter. Meanwhile, Amazon's growth is starting to slow down. A year ago, revenue at the Seattle-based company increased 31%. This year, analysts are forecasting a 24% increase. Next year they see an 18% gain, according to Thomson Financial.