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Amazon reported third-quarter earnings of $199 million, up 68% from the year-ago period, and said its Kindle e-reader was its top-selling item.

The online retailer’s net sales rose 28% to $5.45 billion. Electronics and other general merchandise were up 44% to $2.36 billion, while media sales grew 17% to $2.93 billion.

Amazon said it sees fourth-quarter net sales of $8.13 billion to $9.13 billion, and operating income of $300 million to $425 million, not including shoe retailer Zappos, which it bought last quarter.

Highlights from the call:

4:44 p.m. EST: Ahead of the call, Citi’s Mark Mahaney backs a “buy” rating, writing “AMZN should be extremely well prepared for Q4 — facing shrinking/destocking offline retail competitors, with THE must-have eReader and a significantly strengthening presence.”

4:56: On Seeking Alpha, a commenter points out that until recently there was much less competition for the Kindle, while this quarter Amazon faces Barnes & Noble’s new Nook as well as a burgeoning price war on e-books with Wal-Mart.

5:04: Tom Szkutak, Amazon’s CFO, will be leading the call.

5:07: On operating expenses, fulfillment was $444 million, marketing $144 million.

5:14: “We remain heads-down focused on driving a better customer experience,” Szkutak says.

5:16: Inventory increased, as it has in previous Q3s as it gets ready for Q4, he says. Justin Post from Merrill Lynch hints in his question at e-books competition, but Szkutak says, “Certainly it is very competitive…we have many different competitors.”

5:19: He also passes on a question about whether Amazon would consider opening up the Kindle given increasing competition. “Not a lot I can add to that,” he says.

5:24: “We like what we saw in Q3,” Szkutak says. December is “by far” Amazon’s largest month, but Q4 has some uncertainty, which is reflected in the wide range in the outlook.

5:26: Rob Eldridge, Amazon’s VP of investor relations, says that company is “still very happy” with Amazon Prime world-wide. Prime customers tend to visit the site more, shop different sections of the site more often.

5:30: He declines to break out performance of different components of Amazon’s Web services, but says there’s lots of demand around EC2. Encouraged by the response to AWS.

5:32: “You should expect to see that we will launch new geographies over time,” Szkutak says, in response to a question on international expansion plans. Prime helping there too.

5:34: Cowen’s Jim Friedland asks about foreign-language hurdles as Kindle goes into international markets. Our long-term vision is to have every title, every language, available in less than 60 seconds, Szkutak says.

5:35: Videogame sales were particularly weak last quarter, but within media, we did see an acceleration in all the key categories from Q2 to Q3, Szkutak says. But not discussing it in detail this time.

5:37: The company is “very optimistic” about Web services, he adds.

5:40: Will it be necessary to significantly increase staffing for the holidays, asks Sanford Bernstein’s Jeffrey Lindsay. Every year we supplement our teams with additional staffing, and this year will be no different, Szkutak says.

5:41: “We think China’s a great long-term opportunity,” he says.

5:43: Szkutak says there’s no breakout on growth rates or margins of the book category, so it’s hard to say how pricing changes will affect them. But know that most of our categories operate in competitive environments, he says.

5:47: Call ends.