Apple stock drops despite jump in Q3 profit

"The stock is plagued by high expectations," said Shaw Wu, an analyst for American Technology Research, in an interview. "Looking at the numbers by themselves, they are actually quite strong."

Investors might have been spooked by Apple's conservative outlook for the current fourth quarter, though the company often aims 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.

Investors 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. During the call, Apple noted that the margin was actually better than expected, helped in part by better commodity prices and stronger sales of higher-margin products.

Apple doesn't disclose margins for specific products, but Wu, who rates the stock a "Buy," said Macs are among the company's higher-margin items.

Looking ahead at the fourth quarter and 2009, Oppenheimer forecast even lower margins, tied in part to back-to-school promotions and in part to the launch of "state of the art new products that our competitors just aren't going to be able to match."

The CFO was peppered by follow-up questions about the mystery product from analysts during the call, but declined to give further details.

Wu said he didn't know exactly what Apple is planning, but said he expects changes to the Mac laptop lineup, perhaps aimed at student computer users.

An analyst inquired about the health of Steve Jobs, Apple's chief executive, who had a cancerous tumor removed from his pancreas in 2004.

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