Amazon.com Inc. (AMZN), the Internet's largest retailer, Tuesday said higher revenue and cost cutting helped it narrow its quarterly loss and raise its outlook for the year.

Shares of the Seattle-based Web merchant rose more than 6 percent after it reported a net loss of $43 million, or 11 cents per share, in its second quarter, compared with a net loss of $94 million, or 25 cents, a year earlier.

Chief Financial Officer Tom Szkutak said its U.S. and global customers bought 42 percent more items from Amazon's Web store, growth that was fueled by its free shipping offers and lower prices, helping to drive revenue 36.5 percent higher.

"We're very pleased with the performance we had, with very strong electronics and general merchandise sales," Szkutak told reporters by telephone. "We're also very pleased with our international performance."

Including interest costs but stripping out a range of charges such as stock-based compensation, amortization and other items, Amazon made a profit of 10 cents per share, compared with analysts' average forecast for a profit of 6 cents, according to Reuters Research, a unit of Reuters Group Plc.

Shares of Amazon jumped 6 percent after the results were released, hitting $37.00 in after hours trading compared to the Nasdaq closing level of $34.87.

Revenue Forecast Raised

Second-quarter revenue rose to $1.1 billion from $806 million a year earlier, beating forecasts by Amazon as well as the average of analysts' predictions.

Sales overseas are growing faster than at home, Szkutak said, with U.S. sales up 20 percent from a year earlier while international sales were 81 percent higher.

More than 1.4 million copies of Harry Potter and the Order of the Phoenix were sold, which also helped draw more customers to Amazon's Web site, Szkutak said.

For 2003, Amazon said it now expects its sales of books, music, electronics and other goods to grow at least 25 percent year-on-year to between $4.9 billion and $5.1 billion instead of its previous forecast of $4.7 billion.

For the current third quarter, usually a seasonally slow period for the company, Amazon said it expects to post revenue of between $1.075 billion and $1.15 billion, compared with analysts' average forecasts of $1.03 billion and $851 million in the third quarter of 2002.

Szkutak said that several factors were behind the raised guidance, including the prospect of currency gains and the general health of the economy.

Excluding stock-based compensation, amortization and other charges, Amazon said it expects operating income in the third quarter to be between $40 million and $55 million and between $215 million and $255 million for the full year.