"Apple generated revenue of $8.34 billion, up 12% from last year and ahead of the $8.20 billion Wall Street consensus. International sales accounted for 44% of the quarter's revenue.

"Adjusted sales were $9.74 billion, while adjusted net income was $1.94 billion. The adjusted numbers show the impact of iPhone unit sales in the current quarter instead of being recognized over the life of the contract.

"Gross and operating margins, meanwhile, were very strong. Gross margins came in at 36.3%, up from 34.8% last year and 330 basis points ahead of Apple's guidance.

"Apple continued to build its cash pile, bringing the amount of cash and marketable securities at quarter end to $31.1 billion from $28.9 billion at the end of last quarter and $28.1 billion at the end of December. Cash flow from operations totaled $2.3 billion.

"The company sold about 2.6 million Macs, a 4% increase from a year ago. It said it began and ended the quarter with a 3-4 week channel inventory.

"iPod unit sales, meanwhile, fell -7% to 11 million devices sold. The iPod touch was a standout, though, growing 130% year over year. The company said 50% of customers are still buying their first iPod, and that it holds a 70% market share in music devices according to NPD data.

"The iPhone, however, was the real story, with 5.2 units sold versus only 717,000 a year ago. Revenue recognized from iPhone sales soared over 300% to $1.69 billion from $419 million last year, while the value of iPhones sold in the quarter was $2.9 billion.

"The company said the new iPhone 3GS has been so popular that it has been unable to keep up with demand.

"As usual, management gave its typical cautious guidance, saying it expects fiscal Q4 EPS of $1.18-$1.23. Revenue is forecast to come in between $8.7-$8.9 billion. The consensus analysts forecast prior to the company's release called for earnings of $1.30 per share and revenue of $9.1 billion for Q4.

"Given the stock's run-up prior to its earnings release, we thought Apple would have to turn in not just a great quarter, but a truly exceptional one to keep the bullish momentum going. Well that is just what the company delivered. In addition, the company's guidance wasn't quite as conservative as expected.

"After warning that margins would not be nearly as robust as the previous quarter, Apple turned around and basically matched them sequentially.

"Also impressive, and something that bodes well for the future, are the inroads the iPhone is making in the business world, a space dominated by Research in Motion's Blackberry.

"While the company gave no update on progress in China -- other than to say it's a priority project and that it hopes to be there within the year -- that is another big growth opportunity.

"The truly remarkable thing about Apple's performance the last few quarters is that it has come during the worst recession since the Great Depression.

"It makes you wonder what the numbers could look like if the economy somehow recovers more quickly than expected. Apple remains a 'Buy,' and we're going to bump our Target up to $200 from $170."

Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.