Inc on Thursday posted quarterly profit that handily beat Wall Street estimates and said holiday sales could come in far above expectations, sending shares of the world's largest online retailer up 8 percent.

The company said its Kindle electronic reader had become its single best-selling item in terms of units and dollars.

It said net profit in its third quarter was $199 million, or 45 cents per share, from $118 million, or 27 cents per share, a year earlier.

Analysts, on average, had been expecting earnings of 33 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 28 percent to $5.45 billion, the Seattle-based company said, compared to the Wall Street average estimate of $5.03 billion.

Wall Street expectations for Amazon have been high, with the retailer expected to outpace the market during the crucial holiday season. However, a recent price war with Wal-Mart Stores Inc over books sold online means that margins could be at risk in coming months.

For the key holiday fourth quarter, Amazon said it sees revenue to range between $8.125 billion and $9.125 billion, compared with analysts' expectations for $8.13 billion.

The company forecast operating profit between $300 million and $425 million.

Shares -- which are up 82 percent since January -- rose 8 percent in after-hours trade.

(Reporting by Alexandria Sage, editing by Leslie Gevirtz)