Apple Inc. posted a higher quarterly profit that zoomed past expectations on strong Macintosh sales and said it expected to sell one million iPhones by the end of the current quarter.

It also reported on Wednesday a surprising rise in its profit margin from the previous quarter because of less expensive components and strong direct sales.

Apple said lower component prices and more sales from company-owned stores were behind a rise in profit margins last quarter. It also forecast fourth-quarter results below analysts' estimates.

Apple Chief Financial Officer Peter Oppenheimer reiterated the company's 2008 iPhone sales target, saying it still plans to launch the iPhone in Europe in the fourth quarter of this year and expects to sell 10 million iPhones worldwide.

Apple would debut the combination mobile phone, media player and Web browser in a few European countries at first, then expand to more nations in 2008, Oppenheimer said, adding that the company would announce European partners in the coming months.

The iPhone went on sale in the United States on June 29, but its impact on Apple's results was limited because it was available only in the last two days of the quarter and sales will be booked as subscription revenue over two years.

Shares of Apple (Charts, Fortune 500), up 62 percent since the start of the year when Chief Executive Steve Jobs unveiled the iPhone, briefly dipped in after-hours trade, then rose 10 percent.

"Apple destroyed numbers for this quarter. Its Mac numbers were very strong and above expectations," said Shannon Cross, an analyst at Cross Research.

"Their gross margin at 37 percent was extremely strong and bodes well for HP and Dell from a commodity-price perspective."

Apple's net income for its fiscal third quarter ended June 30 was $818 million, or 92 cents per share, compared with $472 million, or 54 cents, a year earlier. Revenue was $5.41 billion, up 24 percent from $4.37 billion a year earlier.

Apple had been expected to earn $644.4 million, or 72 cents, on revenue of $5.29 billion, according to the average analyst forecast on Reuters Estimates.