Total sales at Amazon rose 29% in the second quarter ended June 30, rising to $12.83 billion, while operating income fell to $107 million from $201 million in last year’s second quarter. Both figures were hurt by foreign exchange and the sales figure was at the high end of its forecast with income exceeded its earlier predictions. North America media sales increased 18% in the quarter, to $1.87 billion, while electronics and other general merchandise jumped 41%, to $4.94 billion. Media sales include all digital content while egm includes all Kindle devices. Worldwide media sales rose 13%, to $4.12 billion, while egm sales increased 38% to $8.16 billion.

Amazon said that since the Kindle Fire launched last November it continues to be the e-tailer’s top selling product and that since that time the top 10 selling items have been a Kindle device, e-book or digital accessory. In some other numbers it threw out, the Kindle Owners’ Lending Library now has over 170,000 titles, and that 20 of its 100 top selling Kindle titles were from self-published Kindle Direct Publishing authors.

Heavy investments continued to keep profits down, with the company estimating it will spend between $800 million to $900 million in the third quarter as it prepares for the holiday season. Some of those investments will go to opening new fullfilment centers; the company has opened six centers this year and could open more than the 18 it had planned to open for 2012. The expansion of centers has helped cut shipping costs, but the company said it doesn't see how it can economically offer one-day delivery "on a broad scale," though it will continue to work to get closer to customers.

Several analysts during the conference call pressed Amazon on the impact sales tax will have on its operations and the company pointed out (as it has in the past) that it already collects some sort of sales or value added tax on about 50% of its business. Amazon will continue to support a federal solution for collecting sales tax in the U.S.

For the third quarter, Amazon expects sales to increase between 19% and 31% and its operating loss to run between $350 million to $50 million compared to earnings of $79 million in the third quarter of 2011.