Inc reported a 73 percent drop in quarterly profit on Tuesday after spending heavily on its new tablet computer and other long-term projects.

Shares in Amazon plummeted 14 percent to $194.31 after hours, after closing at $227.15 on Nasdaq.

The world's largest Internet retailer said third-quarter net income was $63 million, or 14 cents a share, versus $231 million, or 51 cents a share, a year earlier. Revenue was $10.88 billion, up 44 percent from the third quarter of 2010, it added.

Analysts expected Amazon to report third-quarter earnings per share of 24 cents on revenue of $10.95 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Alistair Barr; Editing by Richard Chang)