Amazon sales in the second quarter rose 23%, to $19.34 billion, in line with analysts' expectations, but the net loss of $126 million was deeper than expected. In addition, the company said it expects its third quarter loss to be between $810 million and $410 million compared to a loss of $25 million in the third quarter of 2013. Sales are forecast to rise between 15% and 26%.

The second quarter loss resulted from continued heavy spending by the company on new initiatives with total operating expenses in the quarter jumping to $19.3 billion from $15.6 billion in last year's second period. In addition to investing in its first smartphone, Amazon Fire, Amazon's investment led to the launch or expansion of such projects as European cross-border two day delivery for Prime, Prime Music, original children's television series, and Sunday delivery which 25% of the U.S. population now has access to.

In discussing results with analysts, many of whom were curious about the third quarter forecast, CFO Tom Szkutak said lots of factors went in the prediction. Amazon will build six new warehouses and open 15 "sortation" centers and spend $100 million on original content in the quarter, he said. in addition, the company continues to invest heavily in Amazon Web Services even as it lowers prices to meet competition.Another area of investment is overseas, including China and India. Szkutak didn't argue that Amazon is investing heavily, and noted that the company is happy to do so to prepare for longterm growth.

Top line growth was certainly strong as total media sales (where book revenue is buried) rose 10% and revenue in the electronic and general merchandise category (home to Kindle, among many other products) jumped 27%, to $13.28 billion. Total unit sales rose 21% and Szkutak noted that despite the Prime price increase from $79 to $99 the number of new Prime members rose faster in the just concluded second quarter than in the second quarter of 2013.

Investors, who have given Amazon lots of leeway in making investments, didn't like what that heard on Thursday and Amazon's stock wad down about 10% Friday morning.