Apple stock drops despite jump in Q3 profit

Investors sent Apple shares down $12.60, 7.6 percent, to $153.69 in midday trading Tuesday.

Cupertino, Calif.-based Apple said it shipped more Macs in its fiscal third quarter than ever before--2.5 million, up 41 percent from a year ago, with desktop shipments growing faster than laptops.

That's a much steeper growth rate than the overall global PC market. Total computer shipments rose about 15 percent in the three months ended June 30, according to Framingham, Mass.-based research group IDC.

"The quarter was a home run," Chief Financial Officer Peter Oppenheimer said in an interview.

Apple also said iPod unit sales jumped 12 percent, a strong showing despite last year's launch of the iPhone, which melds iPod features with those of a smart phone. Some analysts had wondered whether iPod sales would lag as consumers opted for fancier, but pricier, iPhones.

The company shipped 717,000 iPhones in the quarter and reiterated its goal to sell 10 million by the end of the fiscal year, including the cheaper, faster iPhone 3G that reached stores in 22 countries in early July.

In all, Apple 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.

Sales from Apple's retail stores, most of which are in the U.S., rose faster than revenue overall, despite economic turmoil wrought by the domestic mortgage and credit crises.