Apple on Tuesday reported third-quarter earnings that beat analysts’ expectations in part due to sales of its popular iPhone.

For the quarter ended June 27, the Cupertino, California, company recorded $8.34 billion in revenue compared with $7.46 billion for the same period last year, and it logged net income of $1.23 billion, up from $1.07 billion a year ago, Apple said in a statement.

Earning per share rose to $1.35 from $1.19 last year, or $0.18 above what analysts surveyed by Thomson Financial had expected for the quarter.

Apple also beat analysts' expectations on quarterly sales. Analysts had forecast revenue of $8.2 billion. The revenue boost was driven by strong Mac and iPhone sales, accounting for more than half of its top line. That came in part because of the release of the faster iPhone 3GS, a price cut on the older iPhone 3G to $99, and an upgrade of the popular MacBook notebooks. The company sold 2.6 million Macs, up 4 percent from a year ago and 5.2 million iPhones, a 626 percent increase from last year.

Long expected, Apple finally saw cannibalization of its iPod. Along with surging iPhone sales, the company said iPod shipments fell 7 percent to 10.2 million--its first yearly drop in iPod sales.

Apple gave conservative guidance for the fourth quarter of 2009, saying it expects revenue between $8.7 billion and $8.9 billion on earnings per share between $1.18 and $1.23.

Apple shares gained $6.10, or 4 percent, to $157.69 in after-hours trading.