Apple Inc, the US multinational corporation with a focus on designing and manufacturing consumer electronics and closely related software products, announced on Tuesday that its first-quarter profit was 58% higher than the same period of the past fiscal year. However, the shares of the Cupertino, California based company dropped after the consumer-electronics manufacturer released an earnings outlook that fell short of Wall Street analysts' forecasts.

Apple Inc, a company which operates about 200 retail stores in five countries, usually makes conservative forecasts, but its latest was far from conservative. The forecast released by Chief Financial Officer Peter Oppenheimer proved to be disappointing especially as Tuesday’s trading session saw most of the major tech stock lose ground in a wide market decline caused by fears of recession.

According to Oppenheimer’s statement, Apple forecasts earnings of 94 cents a share on $6.8 billion in sales for its second quarter. The Wall Street analysts predicted earnings of $1.09 a share on revenue of $6.99 billion.

The forecast sent the company’s shares down more than $17 a share, or 11%, to $138.49 in after-hours trading.

"The company is lowballing the Street on the March quarter, but this is not a good environment to lowball the market. The future stock price will depend on continued strong sales of products and what new products they will be releasing this year." said Romeo Dator, who manages U.S. Global Investors All-American Equity Fund and owns Apple stock as part of the fund, for Market Watch.

Throughout its first quarter of this fiscal year, Apple had profits of $1.58 billion, or $1.76 a share, on revenue of $9.6 billion. For the first quarter of the previous fiscal year, the company reported earnings of $1 billion, or $1.14 a share, on $7.12 billion in sales.

Apple Chief Executive Steve Jobs said in his statement that the company posted its highest quarterly earnings and sales in its history.