The miss stunned Wall Street: Apple shares [AAPL 422.24 2.25 (+0.54%) ] tumbled after-hours and were down more than 7 percent at one point.
Earnings and revenue rose sharply from a year earlier but the number of iPhones sold disappointed, which caused the miss.
Apple earnings excluding items rose to $7.05 a share in its fiscal fourth quarter from $4.64 per share a year earlier.
Net income rose to $6.62 billion from $4.31 billion.
Revenue jumped 39 percent to $28.3 billion from $20.3 billion in the 2010 third quarter.
Analysts had expected the technology giant to earn $7.39 per share on revenue on $29.69 billion. It was the first miss for the company since 2004.
The company sold 17.07 million iPhones during the quarter; That was a 21 percent increase from a year earlier but Wall Street had expected something in the 18 million to 20 million range, given that 20.3 million were sold in the third quarter.
Apple's CFO said that number beat their internal projection but sales were hurt by customers waiting for the new version of the iPhone.
IPad sales more than doubled to 11.12 million, while Mac sales jumped 26 percent to 4.89 million. IPod sales fell 27 percent to 6.62 million.
Gross margin came to 40.3 percent, a tad higher than Wall Street's forecast of 39.74 percent. International sales accounted for 63 percent of the quarter's revenue.
The company did, however, deliver a better-than-expected outlook for the fiscal first quarter, which starts in October. Apple said it expects earnings of $9.30 a share for the first quarter; analysts had expected $9.01 a share, according to Thomson Reuters.
"What is interesting is the guidance is less conservative than usual for their next quarter. It's a timing issue, where it looks like the business that people thought would be in the September quarter is occurring in the December quarter," said Sterne Agee analyst Shaw Wu.
"One of the things obviously is the iPhone 4S just started shipping a few days ago."
This was the first quarterly report issued by Apple under the leadership of CEO Tim Cook, who took the reins in August after Steve Jobs stepped down. Jobs passed away on Oct. 5.
Cook takes over during a critical juncture for the company, which is battling a fast-rising Google [GOOG 590.51 8.10 (+1.39%) ] in the mobile arena while fending off consumer electronics giants such as Samsung and Amazon.com [AMZN 243.88 1.55 (+0.64%) ].
"Expectations for this company were red-hot, that is why we downgraded it,'' said BGC Partners analyst Colin Gillis, who lowered his rating on the shares days before. "The reality is their business is not an annuity. They have to sell their quarter's worth of revenue every 90 days."
"They had a big upgrade cycle with the iPhone, the numbers came in weak. They need to set records every time they report to keep up the momentum."
"There's no question this was a transition quarter ahead of the 4S," said WP Stewart portfolio manager Michael Walker. "With the early pace of iPhone 4S sales, my guess is that disappointment is relatively short-lived."
"I'm not going to call Q3 a throwaway quarter for iPhones, but it was definitely transition," he said.
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