San Francsico - Online retailer Amazon.com posted a 48 per cent rise in third-quarter profits Wednesday, but the challenging economic conditions prompted the company to curtail its outlook for the vital fourth-quarter holiday shopping season.

The Seattle-based company said net income rose to 118 million dollars, or 27 cents a share, from 80 million dollars, or 19 cents a share in the same period a year earlier. Revenue for the period rose 31 per cent to 4.26 billion dollars.

Amazon on Wednesday said it now expects revenue for its fourth quarter to be between 6 billion dollars and 7 billion dollars, lower than Wall Street expectations of 7.07 billion dollars.

For the year sales will be 18.46 billion dollars to 19.46 billion dollars, compared with the company's July forecast of 19.35 billion dollars to 20.10 billion dollars. Operating income will be 716 million dollars to 876 million dollars, compared with 745 million dollars to 920 million dollars.

Shares in Amazon have slumped roughly 40 per cent in the past two months over fears of the impact of the worsening economy. Following the earnings announcement Wednesday the company's shares plunged a further 14 per cent.