PALO ALTO, U.S.-- Amazon's year of record profits has come to an end, with the e-commerce giant announcing disappointing second-quarter results on Thursday.

The company blamed the earnings miss on higher shipping costs and slower growth in its cloud business but said it holds high hopes for its international markets, notably India, as it searches for new growth in both its retail and cloud segments.

Amazon's international sales grew 12% on the year in the quarter through June, but the segment remains a money-loser. Its net loss widened to $601 million for the quarter, compared to the $494 million loss last year.

But while competition with Walmart and other e-commerce platforms intensifies at home, Amazon is optimistic about its growth prospects outside the U.S.

India is one of the main overseas regions that Amazon is investing heavily in.

"We continue to see growth in programs for our sellers and delivery partners," Chief Financial Officer Brian Olsavsky said. "We invested a lot in our global selling program, which helps our Indian sellers not only reach customers in India but also in other geographies around the world."

He added that the number of paid Prime members in India has doubled in the past 18 months, without giving specific numbers.

The company introduced Amazon Flex in India last quarter, a program that the company says helps local partners deliver packages and creates related jobs, something Olsavsky described as a "win-win" project.

Amazon also introduced a packaging-free shipment program in nine cities in India, aimed to reduce shipping-related waste.

But investors and analysts are keen to know how Amazon plans to deal with the increasingly tight e-commerce regulations in the country. India announced a new regulation last December banning e-commerce companies from selling products through local businesses in which they hold a stake. The government also tightened rules on practices such as deep discounts.

New e-commerce rules as such indicate foreign retail giants including Amazon are facing an unfriendly and protective regulatory environment in India which favors domestic companies. Despite the challenges, companies including Amazon also don’t want to give up a high growth region where e-commerce market is forecast to be worth $200 billion by 2026, up from $38.5 billion in 2017, according to India Brand Equity Foundation.

Amazon management said on the call Thursday that the company is trying to win over the India government by laying out the benefits it brings such as building technology infrastructures, labor skill training, and job opportunities.

"Our engagement with the Indian government makes us optimistic that we are partnering and collaborating to see stable and predictable policies," Olsavsky said.

Amazon reported a second-quarter profit of $2.63 billion, which is up 4% on the year but still lower than Wall Street analysts' consensus. The company had beaten the street estimates for the past year, posting four consecutive quarters of record profit.

The company blamed the higher costs related to ramping up its one-day delivery service, a quarterly slowdown in its high-growth cloud business and compensation-related expenses for the disappointing earnings.

The end of its yearlong run of record-high earnings brought its share price down to $1941.2 in after-hours trading, 1.7% lower than the closing price on Thursday.