The boost Amazon received from Prime Day wasn't high enough to vault the retail giant over Wall Street's expectations. 

Amazon said Thursday that its third-quarter revenue jumped 29 percent, to $56.6 billion, helped by a take from its annual Prime Day sale that RBC Capital Markets estimated at $2 billion. Amazon's increased revenue still fell shy of the $57.1 billion analysts had predicted, though. The tech powerhouse said revenue was hurt by changes in foreign exchange rates.

Investors weren't looking for excuses; shares fell more than 8 percent, to $1,632.61, in after-hours trading. 

On the good side, the world's largest e-commerce site reported profit of $2.9 billion, up from $256 million a year ago, and continuing its streak of $1 billion-plus quarterly results following years of meager profits or losses.

Despite the lower-than-expected revenue, Amazon's finance chief, Brian Olsavsky, said on a call with reporters Thursday that the company considers it "a really strong quarter." 

Amazon's guidance for the fourth quarter was also soft, with the company expecting sales of $66.5 billion to $72.5 billion, below estimates of $73.9 billion, according to Yahoo Finance. "We're expecting a strong holiday season," Olsavsky said, "so there's no message in our forward guidance against that."

Amazon's third-quarter report arrives a few weeks before the holiday shopping season, when Amazon and other retailers enjoy a weeks-long spike in sales. The upcoming season is expected to benefit from a strong US economy and low unemployment, with the National Retail Federation predicting a 4 percent rise in consumer spending during the holidays.

There may be further wrinkles this holiday.

In a bid to siphon shoppers away from Amazon, both Walmart and Target this week stepped up their free two-day shipping programs, which are available without a membership fee. Amazon already offers free shipping on millions of products if a customer buys at least $25 of goods, but it offers two-day shipping at no additional cost only to its Prime members.

Those retail rivals made that change a few months after Amazon decided to raise Prime's annual fee to $119, which could hamper Amazon's sales. So far, the company has said that hasn't happened.

"We're very happy not only in the strong membership numbers," Olsavsky said Thursday, "but also in the continued strength of engagement" with Prime's shipping benefits and Prime Video.

The moves underscore the increasingly competitive landscape as retailers battle it out for your business. With Amazon continuing to surge thanks to more consumers spending more online, traditional retailers like Toys R Us and Sears have fallen into bankruptcy protection. Now Walmart, Target and others are working harder to play catchup against Amazon to hold onto their customers.

Additionally, Amazon earlier this month said it would boost its minimum wage to $15 an hour, with the change taking effect next Thursday.

About 350,000 US Amazon employees and seasonal workers will see their wages increased, but that boost isn't expected to seriously crimp Amazon's bottom line.

It'll cost Amazon an extra $333 million to fund its higher salaries during the fourth quarter, according to Cowen, a financial research company. Even with that wage increase, Amazon is still expected to post a 31 percent rise in operating income from the year earlier, to $3.3 billion.

The pay boost should help the company quiet its critics, who've complained about its treatment of warehouse workers, while also allowing Amazon to draw in and retain more workers just ahead of the holidays during a tight labor market.

For the quarter, Amazon reported per-share earnings of $5.75, up from 52 cents a year earlier and easily beating Wall Street's expectations of $3.14, according to Yahoo Finance.

Sales from Amazon's main online stores rose 11 percent from a year earlier, while the Amazon Web Services cloud-computing unit reported a 46 percent increase in sales. The company's burgeoning advertising business continued to show strength, with sales more than doubling in the quarter.

First published Oct. 25, 1:18 p.m. PT.
Update, 2:04 p.m.: Adds finance chief's comments.

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