Apple beats estimates but guides lower

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NEW YORK (CNNMoney.com) -- Computer and consumer electronics maker Apple reported fiscal third-quarter earnings Monday that beat forecasts on strong sales of Mac computers and iPhones. But shares fell after-hours as the company's outlook for the fourth quarter disappointed investors.

The Cupertino, Calif.-based company posted fiscal third-quarter net income of $1.07 billion, or $1.19 per diluted share, up 31% from last year's earnings of $818 million, or 92 cents per share. Analysts were expecting earnings of $1.08 per share according to Thomson Reuters.

Sales rose to $7.46 billion, up 38% from the same quarter a year ago when Apple reported sales of $5.4 billion. Wall Street was forecasting revenue of $7.4 billion.

The company said it shipped nearly 2.5 million Macintosh computers during the quarter, up 41% versus last year, and the highest number of Macs shipped in company history.

Apple also said it sold 11 million iPods and 717,000 iPhones in the quarter.

"We set a new record for Mac sales, we think we have a real winner with our new iPhone 3G, and we're busy finishing several more wonderful new products to launch in the coming months," said Apple CEO Steve Jobs in a written statement.

Apple introduced its cheaper and faster 3G version of its popular iPhone earlier this month. The company said it sold 1 million iPhone 3Gs during the first three days that it was available.

Looking ahead, the company is expecting revenue of about $7.8 billion and earnings per share of about $1.00 in its fiscal fourth quarter, which ends in September. That's well below the $8.32 billion in sales and $1.24 earnings per share estimate that analysts are forecasting.

For the fiscal year 2009, which begins in September, Apple expects its gross margins to shrink to 30%.

However, the company has a history of issuing conservative guidance.

Peter Oppenheimer, Apple's CFO, said on a conference call with analysts that the company's profit margins will be pressured in part by a "future product transition" that he said he was not at liberty to discuss at the present time.

Also weighing on Apple investors' minds is the issue of Jobs' health. The New York Post published a story Monday raising questions about Jobs' apparent weight loss and discussed rumors that his cancer has returned.

In response to a question regarding Jobs, Oppenheimer told analysts that "Steve loves Apple and serves at the board's pleasure. He has no plans to leave Apple and Steve's health is a private matter." Jobs, as is usually the case, did not participate in the earnings conference call.

Apple (AAPL, Fortune 500) shares fell more than 10% after the announcement. The stock rose slightly in regular trading on the Nasdaq Monday.

"A combination of lower guidance for next quarter and discussion of a 30% gross margin for next year," helped push the stock lower, said Andy Hargreaves, an analyst at Pacific Crest Securities.

Oppenheimer's open-ended response to the question about Jobs' health is also affecting Apple's stock price, Hargreaves said.

Apple is the latest company to shine a light on the health of the technology sector. Intel Corp. (INTC, Fortune 500), the world's largest chipmaker, reported last week that its second-quarter profits increased 25% thanks to strong international sales due to a weak dollar.

But earnings for software maker and Apple rival Microsoft (MSFT, Fortune 500) fell short of Wall Street's estimates and offered guidance that disappointed investors.