Apple Beats Street But What About Those iPhone Sales?

Apple Inc.released its Third Quarter numbers and for a company more than doubling this past year, this was not the news investors were hoping for. The Third Quarter was a blow-out by normal standards: the 92 cents a share and $5.41 billion in revenue soundly beat the 72 cents and $5.285 billion the Street expected. Same goes for the 1.76 million Macs and 9.8 million iPods shipped on the quarter. Gross margins climbed to 36%. All very good news.

The trouble comes from iPhone. Buried on a table inside the report--and not broken out in the text of the press release--Apple discloses that it sold 270,000 iPhones. AT&T was able to activate 146,000 of them. Most troubling is the quote in the release from Apple CEO Steve Jobs: "We hope to sell our one-millionth iPhone by the end of its first full quarter of sales."

That'd be optimistic and robust for any other product at any other company. But this is Apple. And the iPhone. Where expectations were for a half-million units in two days. Now Apple says it'll take 90 days to sell twice that number. Ugh.

Apple shares were halted moments before the earnings news was released. When it re-opened at 4:50p ET, the volatility was enormous. Up. Down. Up. Down. Huge moves as investors try to digest far lower-than-expected Fourth Quarter guidance.

This conference call will be very important. Apple has some 'splainin' to do! Stay tuned.

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