The computer company Apple smashed Wall Street forecasts as strong sales of its iMacs and the explosive launch of the iPhone sent its profits up 36% to $1.05bn.

Chief financial officer Peter Oppenheimer described the performance as "awesome", although weaker than expected guidance on future earnings sent Apple's shares down slightly in after-hours trading.

Apple's overall revenue was up 42% to $7.51bn. Sales of Mac computers jumped 51% to 2.28m as the terminals continued to prove a rival to PCs.

Quarterly shipments of iPhones, unveiled last summer, reached 1.7m aided by launches in Ireland and Austria. The phones, which use a touch-screen system, have proved an instant hit. Oppenheimer said: "We're very pleased with iPhone momentum and we remain confident of achieving our goal of selling 10m iPhones in calendar [year] 2008."

Defying predictions that the market for its music players had reached saturation, Apple said sales of iPods rose 1% to 10.6m. Its iTunes online music store recently overtook Wal-Mart to become America's biggest vendor of music.

"The only fly in the ointment would appear to be the earnings guidance," David Garrity, an analyst at Dinosaur Securities, told Bloomberg News. "Investors are jumpy, if nothing else."

In common with other consumer businesses, Apple is vulnerable to concern that America's economic downturn will mean a drop in spending by its customers. The company said that in its present quarter it expected revenue of $7.2bn, a shade below expectations.