Apple reported earnings of US$61 million, or 17 cents a share -- a 70 percent decline from the same quarter last year when Apple earned US$200 million, or 55 cents a share, including investment gains.
Analysts expected the Mac maker to earn 15 cents per share, according to First Call.
Although revenue declined 19 percent to US$1.48 billion from US$1.83 billion in the year-ago quarter, Apple showed a slight gain over its second quarter revenue of US$1.43 billion.
Apple shares closed up US$1.14, or 5 percent, at US$25.10. In after-hours trading, though, the stock dropped US$2.50 to US$22.60. Apple realised a US$7 million favourable after-tax effect from its net equity investment gains, but these were offset by an after-tax charge of US$7 million related to its acquisition of PowerSchool. These one-time events had no significant effect on the quarter's results.
"We had a great education quarter, with significant year-over-year growth, and a great iBook quarter, shipping over 182,000 of our new wildly popular consumer and education notebooks," Apple CEO Steve Jobs said in a statement.
Apple said it shipped 827,000 Macs during the quarter, which ended June 30. This compares with 1.02 million units a year earlier and 751,000 during the second quarter.
The company reported gross margins of 29.4 percent for the quarter, a decrease from the 29.8 percent a year earlier. International sales made up 44 percent of the quarter's revenues.
Fred Anderson, Apple's chief financial officer, offered guidance for the current quarter.
"We're delivering solid profitability while maintaining lean channel inventories in a weak economic environment," he said in a statement. "Our balance sheet remains very strong, with over US$4.2 billion in cash, and we are targeting a slight sequential increase in revenues and earnings per share in the (fourth) quarter."
