Investors take a bite out of Apple

Apple's innovative products, such as the iPhone, have helped fuel the tech giant's consistent growth in recent years.

NEW YORK (CNNMoney.com) -- Computer and consumer electronics giant Apple announced fiscal second-quarter sales and profits on Wednesday that beat Wall Street's expectations thanks to a 51% increase in Macintosh sales.

But the stock dipped slightly after-hours as Apple gave sales and earnings guidance for its third-quarter that may have disappointed investors.

Apple (AAPL, Fortune 500) posted net income of $1.05 billion, or $1.16 per share, up 36% from a year ago and beating analysts' forecasts of $1.07 per share.

Sales topped $7.51 billion, up 43% from the same quarter a year ago. Analysts polled by Thomson Financial were expecting revenue of $6.96 billion.

Apple CEO Steve Jobs boasted about the company's strong results. "With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters," Jobs said in a statement.

Shares of Apple surged more than 4% initially after-hours but then slipped as much as 4%. That followed a 1.7% gain in regular trading.

The pullback could be due to Apple's forecast for its fiscal third-quarter. The company said that it expects sales of $7.16 billion, roughly in line with consensus estimates of $7.2 billion.

But it also said it expects earnings of about $1.00 per share, significantly below expectations of $1.10 per share.

Investors shouldn't be too surprised though since Apple consistently is conservative with its guidance.

To that end, Apple's own targets for the fiscal second-quarter were for just 94 cents per share in earnings and $6.8 billion in sales.

Gene Munster, an analyst with Piper Jaffray, said in a conversation before the earnings announcement that Apple likes to make sure that Wall Street analysts don't set targets for Apple that the company can't match.

"The estimates would get crazy," Munster said about why Apple typically issues lowball guidance.

And during a conference call with analysts, Apple chief financial officer Peter Oppenheimer did not appear too concerned about the economic slump. When asked if Apple is feeling any effects of the slowdown, Oppenheimer said that traffic in Apple's retail stores continue to grow.

He added that Apple plans on opening 45 stores this year, including stores abroad. International sales accounted for 44% of the company's second quarter revenue.

But it has been a volatile couple of months for Apple. Shares plunged earlier this year along with other tech stocks due to concerns about the slowing economy as well as fears about competition for Apple's iPhone from Research in Motion's (RIMM) Blackberry and smartphones made by Nokia (NOK) and Motorola (MOT, Fortune 500).

Shares have recovered in recent weeks on hopes that Apple would report strong Mac sales. Along those lines, technology research firms IDC and Gartner recently reported that Apple's computer sales in the U.S. grew faster than the overall industry in the first quarter.

According to Apple, the company shipped nearly 2.3 million Macintosh computers during the quarter. Revenue from Macs surged 54% from a year ago.

Munster said after the company's earnings were released that the "Mac business is defying gravity" and added that the strong Mac sales are a sign that more and more Mac users appear to be convincing their friends to buy Macs.

Apple still is a niche player in the personal computer business though, trailing Dell (DELL, Fortune 500), Hewlett Packard (HPQ, Fortune 500) and Acer, the Taiwanese computer manufacturer that acquired Gateway Inc last year, in U.S. market share.

Apple also sold more than 10.6 million iPods, up just 1% from a year ago. Revenue from iPods increased 8% over the year-ago quarter. The company also sold 1.7 million iPhones during the quarter.