Apple stock off despite 31 percent profit leap

ASSOCIATED PRESS

Macintosh and iPod sales helped boost Apple Inc.'s fiscal third-quarter earnings 31 percent, beating Wall Street's expectations yesterday, but investors pummeled the stock after Apple issued soft guidance for the current quarter.

Steve Jobs, Apple's chief executive officer, did not join the conference call with investors as he commonly does, prompting an analyst to inquire about his health. Jobs has survived pancreatic cancer.

"He has no plan to leave Apple," chief financial officer Peter Oppenheimer responded. "Steve's health is a private matter."

Apple, based in Cupertino, Calif., earned $1.07 billion, or $1.19 per share, 11 cents ahead of Wall Street's expectations, according to a Thomson Financial survey of analysts. Revenue jumped 38 percent to $7.46 billion, ahead of analysts' average view for $7.37 billion in sales.

Apple said it shipped more Macs in the quarter than ever before - 2.5 million, up 41 percent from a year ago, with desktop shipments growing faster than laptops. Apple also said iPod sales jumped 12 percent.

Oppenheimer said sales from U.S. stores rose faster than revenue overall, despite economic turmoil wrought by the domestic mortgage and credit crises.

He also teased forthcoming "state-of-the-art new products that our competitors just aren't going to be able to match," but told investors he could not give any details.

Shares sank $10.40, or 6.3 percent, to $155.89 in after-hours trading, after gaining $1.14 to close at $166.29.

Investors might have been spooked by Apple's conservative outlook for the current fourth quarter, though the company often shoots low. Apple predicted profit of $1 per share on $7.8 billion in sales, well short of Wall Street's expectations. Analysts had been expecting Apple's fourth-quarter earnings to reach $1.24 per share on $8.32 billion in sales.

They may also have been eyeing a drop in Apple's gross margin, which fell to 34.8 percent from 36.9 percent in the year-ago quarter.