Shine Comes Back to Apple

The company's gross margins were flat sequentially at 27.8%.

Looking forward, Apple expects fourth-quarter revenue of $2.1 billion and fourth-quarter earnings of 16 cents to 17 cents a share, with gross margins falling to 27% to 27.25% because of constraints on microprocessor supply and a high mix of iPod music players. Analysts were forecasting earnings of 17 cents a share on $2.057 billion in revenue for the fourth quarter.

In a postclose conference call, CFO Peter Oppenheimer said Apple expects revenue for the full fiscal year to cross $8 billion, representing 29% revenue growth. That would exceed the current consensus estimate of $7.921 billion.

"The [iPod] demand in the U.S. is staggering, and on top of that, the orders internationally as we launch later this month, those orders are unprecedented," Tim Cook, executive vice president of worldwide sales and operations, said of the company's hit portable music player.

"The demand for the Mini is extremely, extremely strong," Oppenheimer added, referring to Apple's new iPod Mini digital music player, which Apple plans to sell outside the U.S. later this month.

Music-related business soared 162% in the third quarter compared to a year ago.

But in its core Mac business, Apple is still grappling with a significant supplier problem. The company was peppered with questions on the conference call about delays in the launch of its new iMac computer due to processor manufacturing problems at IBM (IBM Quote), as announced earlier this month.

The company said it will ship the next version of iMacs in September but will run out of stock of existing iMacs in a few weeks. That means Apple will have to sit out at least part of the crucial back-to-school buying season. The company resisted repeated attempts by analysts to pin down exactly when in September it hopes to ship iMacs and thus determine how much of the back-to-school season Apple will miss.