Apple Earnings Soar, Topping Estimates

The iPhone was once again a big hit during the quarter, with Apple selling 8.4 million units of the popular smart phone, with even more devices estimated to be sold during the current quarter. Analysts had been expecting to see 8.5 million iPhones sold.

To put in perspective just how popular the iPhone is, remember that this time last year everyone was amazed at just how strong the phone was still selling ... then consider that this quarter sales were up a remarkable 74% year over year.

The newest generation iPhone, the iPhone 4, launched right at the end of June so that makes it a bit more difficult to predict third quarter numbers, but Piper Jaffray analyst Gene Munster has forecast that Apple could sell as many as 9.5 million units, despite problems with the antenna design.

iPad sales were strong in the quarter, with 3.27 million units being sold at an average price of $640.

iTunes sales were up 25% year over year, and topped the $1 billion mark. Apple also announced that over 5 billion applications had been downloaded from from its App store.

Mac sales continued to grow as well in the quarter. Apple sold 3.4 million Macs during the quarter, above the 3.1 million units that analysts had been expecting. The company had double-digit growth in Mac sales over all regions, and set a record number of deliveries.

Apple computers continue to gain in popularity, and a big reason for this can be attributed to Apple retail stores. It was not that long ago that Apple computers were perceived to be just for designers and artists, but that myth is slowly evaporating, and a big reason for this is that people can walk into their local Apple store, play around with a Mac, and realize that it will do everything their PC will do -- in some cases, better.

If you have ever walked by an Apple store you know how crowded they are, and the company is looking to continue growing its retail presence during the quarter, announcing that it would be opening 24 new retail stores this year.

Revenues during the third quarter were $15.8 billion. For the current fourth quarter, Apple forecast revenues of about $18 billion, with earnings of $3.44 a share.

The stock is up 3.5% in pre-market trading.