Fueled by brisk back-to-school sales of its MacBook and continued momentum of its popular iPhone, the Cupertino, Calif., company said it posted its 'most profitable quarter ever.' Earnings of $1.67 billion far exceeded analysts' expectations and reflected another sign that the technology sector might be a bellwether for a larger recovery. Apple's results followed others in recent weeks that have all beat Wall Street's forecasts, including Goggle Inc. reporting last Friday that its quarterly profit jumped 27 percent. 'We are thrilled with these results,' Apple Chief Financial Officer Peter Oppenheimer said during a conference call with analysts, 'particularly given the economic environment around us.' Analyts were expecting the company to report profits of $1.3 billion on sales of $9.1 billion, but Apple sales jumped 24 percent to $9.87 billion from the year earlier quarter. Apple shares surged following the earnings announcement, rising as much as 8 percent in after-hours trading and briefly surpassing its all-time high of $202.96 a share set in December 2007. Its shares had closed up $1.81 to $189.86 prior to the earnings release. Earlier this year, analysts wondered how the company would fare, given that its premium-priced products are considered discretionary. Apple appeared to show little if any bruising from an economy that has affected nearly every other company. Apple sold more than 3 million of its pricey Mac laptop and desktop computers in the quarter, up 17 percent from the same quarter last year. And sales of its popular iPhone grew 7 percent to 7.4 million units last year. Apple Chief Executive Steve Jobs, in a statement, said the company sold more Macs and iPhones than in any other quarter. Not everything Apple touches has turned to gold, however. Sales of its iPod music players fell 8 percent to 10.2 million units last quarter. Apple attempted to add sizzle to iPod sales on Sept. 9, adding video recording capability to its Nano model and lowering the price of its high-end iPod Touch to $199 for the 8-gigabyte model. The gambit worked. Sales of the iPod Touch, which has many of the same functionalities as the iPhone, grew 100 percent, Oppenheimer said. Looking ahead, Apple is poised for more good news, said Trip Chowdhry, analyst for Global Equities Research. More than three out every five Macs currently in the market use an old chip technology called Power PC. Their owners are likely to upgrade to the new Macs using semiconductors from Intel Corp. in the coming year, Chowdhry said. The reason: Apple recently released a new operating system for its Macs, called Snow Leopard. 'Many people will use Snow Leopard as a reason to upgrade their Macs,' he said. Apple, however, will face a formidable foe this holiday when cell phone manufacturers release their answers to the iPhone, so-called smart phones equipped with Google Inc.'s Android operating system. 'Starting this holiday, the free reign Apple has had in smart phones will be challenged for the first time,' he said. 