Updated from 7:16 a.m. EDT

Apple Computer ( AAPL) has a credibility problem.

Shares of the technology pioneer were climbing early Thursday as Wall Street celebrated an extraordinary third quarter and laughed off soft guidance, assuming Steve Jobs will find a way to overcome whatever obstacles exist.

In a conference call Wednesday night, Apple warned that it expects software sales to slow in the current period and expressed concern about how an announced processor transition will affect sales of its Macintosh computer.

The guidance was "prudent," said Tim Cook, executive vice president of Apple's worldwide sales and operations, on the call. Cook noted that the outlook still represents 50% revenue growth over the same period last year, adding that such an outcome would be "frankly stunning."

Investors agreed with that part. In early trading Thursday, the company's shares rose $2.41, or 6.3%, to $40.75.

Shareholders had much to like about Apple's report. In the quarter ended June 25, the company earned $320 million, or 37 cents a share, on sales of $3.52 billion. In the same period a year earlier, the company posted a profit of $61 million, or about 8 cents a share, on $2.01 billion in sales, meaning that the company's earnings more than quintupled on a whopping 75% jump in sales.

Excluding certain stock-based compensation expenses, Apple would have earned $330 million, or 38 cents a share, in the quarter.

Presumably on this basis, Wall Street had predicted that Apple would earn 31 cents a share on $3.34 billion in sales in the quarter, according to Thomson First Call. Back in April, Apple officials forecast the company would earn 28 cents a share in the quarter on $3.25 billion in sales.

Looking forward, Apple projected it would earn 32 cents a share in the current quarter on $3.5 billion in sales.

Apple officials did not say whether the outlook includes stock option expenses. New accounting rules require all companies to include stock options costs in their income statement at the end of their current fiscal year. Apple, like many other companies, previously took advantage of a loophole that allowed it to merely mention such costs in a footnote to its financial statements.

Regardless, Apple's outlook was slightly lower than Wall Street's estimates. Sell-siders had previously predicted that the company will earn 33 cents a share on $3.58 billion in sales in its fourth quarter.

Apple's prediction that sales would decline sequentially from its third quarter seemed to surprise many analysts on the call. The fiscal fourth quarter is typically a robust one for Apple, due to its strong presence in the education market, which sees an upsurge in sales during the back-to-school period.

But counteracting that potential uptick will be a likely decline in software sales, CFO Peter Oppenheimer said on the call. Apple released OS X Tiger last quarter, the latest version of its Mac operating system. Sales of the software totaled about $100 million in the quarter, Oppenheimer said on the call. While he declined to forecast Tiger sales in the current period, Oppenheimer noted that sales of the previous release of OS X declined about 60% sequentially the quarter after it was released.

Oppenheimer also noted that Apple's recent announcement about changing the chips underlying its computers could affect sales. Last month, Apple announced that it plans to move to Intel chips at the heart of its Macintosh computers, replacing the PowerPC processors on which they currently run. Some analysts have worried that the shift could slow sales.

While Apple hasn't seen any softness in demand to date, the company is still trying to gauge the impact of the announcement, company officials said on the call.

What effect the transition announcement will have on Mac sales "is a difficult question to answer," said Cook. "We have only limited data at this point."

Indeed, the data from the just-completed quarter was largely positive for the company from the Mac standpoint. Unit sales of Apple's PowerMac, iMac and other desktop lines grew 65% over the same quarter last year to 687,000. Meanwhile, revenue from those sales grew 49% over the same time period to $845 million.

Sales of the company's portable computers grew at a much slower pace, rising just 3% to $720 million year over year. Still, the 495,000 notebook computers the company shipped in the quarter represented a new quarterly record, company officials said.

The robust overall performance of Apple's computer sales likely will be cheered by investors. Many have been hoping the popularity of Apple's iPod sales would help draw in new customers to the company's Macintosh computers. That seems to be happening. In the just-completed quarter, Apple's computer sales grew three times faster than the broader PC market, company officials said, marking the third straight quarter that Apple seems to have gained market share.

In addition to the pickup in desktop demand, Apple's results were driven by strong sales of iPod digital music players. iPod sales grew 343% year over year to $1.1 billion. Unit sales of iPods more than septupled to 6.2 million units. Even on a sequential basis, the sales appeared strong, with unit sales up 16% from the second quarter and dollar sales up 9%.

The iPod results came in better than the expectations of some analysts and ran counter to some indications within the industry. Both SigmaTel ( SGTL) and Creative Technologies ( CREAF) recently warned that their quarterly revenue would come in below expectations thanks to lower-than-expected consumer demand for MP3 players.

Still, Apple's report did have some potentially troubling signs. For at least the second quarter in a row, the average sales price of Apple's iPod fell in the third quarter. Apple saw about $179 for each of the digital music players it sold in the quarter, down from about $191 in the second quarter and nearly $290 in the year-ago period.

The decline in average prices is likely the result of a shift in Apple sales. In January, the company introduced a bargain digital music player and has repeatedly cut prices on some of its higher-end offerings.

Meanwhile, the company's inventory rose 18% sequentially from the second quarter to $193 million. That total was up some 168% from the same period a year earlier.

The inventory build was largely related to the seven new retail stores Apple opened in the quarter, Oppenheimer said. The company began and ended the quarter with inventories for both its iPod and Macintosh lines within its targets, Cook said. Channel inventory for iPod is running at four to six weeks, while for Macinosh it's running at four to five weeks, he said.

"We feel extremely comfortable with our inventory level," Cook said.

Apple posted sizable computer sales growth in both North America and Europe and with its retail segment, each of which grew dollar sales at a 70% annual pace or better. But the company's computer sales in Japan came in at a far slower pace.

While dollar sales in Japan grew 32% year over year, unit sales in Japan fell 7% over the same period. And on a sequential basis, both dollar and unit sales in Japan fell more than 20% from the second quarter.

If sales numbers were adjusted to include sales through its retail stores in Japan, Apple's computer sales would be faster than the forecasted market rate of growth there, Cook said. However, he added that Apple is "unhappy" with its performance in Japan and is making changes to try to boost sales there.