'Stunning' iPhone sales help lift Apple's revenue up 27%

— -- Oh, that iPhone!

Apple's combination cellphone, iPod and Internet device now represents nearly 40% of sales, a "truly stunning" achievement, says Apple aaplCEO Steve Jobs.

Apple on Tuesday reported quarterly revenue of $7.9 billion, up 27% from $6.2 billion in the same quarter a year ago. Earnings rose to $1.14 billion, up from $904 million.

However, sales and profit for the quarter were actually much higher, Jobs said, since "subscription" accounting for the iPhone forces the company to spread the impact of its sales over two years. Otherwise, Apple revenue would have been $11.6 billion, with earnings of $2.4 billion.

"If this isn't stunning, I don't know what is," Jobs said in a conference call with analysts.

Breaking out the complete numbers "tells a very different story," says Gene Munster, an analyst at Piper Jaffray.

Munster said he was less interested in the numbers Apple reports to its auditors than in the bigger picture of how the company performed: "The value of the stock is about what's really going on."

Apple said it has now sold 13 million iPhones — 3 million more than Jobs' original prediction of 10 million in the first calendar year.

The company said it sold more phones in the quarter than BlackBerry-maker Research In Motion — 6.9 million, vs. 6.1 million BlackBerrys.

Sales of Apple computers and iPods also were very strong. Apple said it sold 2.6 million computers — more than any other quarter. Sales of 11 million iPods represent its best non-holiday quarter.

Still, said Jobs, "We don't yet know how this economic downturn will affect Apple."

Apple said it saw some slowdown in sales in September as the economy began heading south, particularly in sales to schools.

But Jobs said Apple would not start selling low-end computers. Apple customers, Jobs said, were more likely to delay purchases than switch from Apple.

More important, he said, Apple is sitting on $25 billion in cash reserves and "zero" debt.

"We may get buffeted around a bit by the waves, but we'll be fine," he said.

For now, says Munster, "Apple seems to be bucking the trend."

Investors were enthusiastic about the results. Apple rose $13.60 in after-hours trading, to close at $103.93, after falling $6.95 during the regular session.