Apple's shares continue to claw back recent losses as analysts and investors consider the company's third quarter results.

The company reported its second best-ever quarterly performance, returning revenue of $4.37 billion and a net quarterly profit of $472 million.

Apple shipped 1,327,000 Macs and 8,111,000 iPods during the quarter, representing 12 per cent growth in Macs and 32 per cent growth in iPods over the year-ago quarter.

Analysts at Needham & Co, American Techology Research, Deutsche Bank and others all issued revised - and favourable- guidance on the company in response to better than anticipated performance.

Needham & Co analyst Charles Wolf said: "We're raising earnings per share estimates and maintaining a buy rating and $90 price target."

Wolf expects a new Intel-powered Power Mac replacement will debut at Apple's Worldwide Developer Conference (WWDC) in August. He also expects a new iPod nano in autumn and more activity in Apple's music player range in 2007.

Alluding to Apple chief financial officer, Peter Oppenheimer's hints at an iPod phone, Wolf expects even more iPod activity in 2007, but isn't certain that mobile phones make the best music players.

"We believe the popular notion that mobile phones are going to take over the music player market is ... ridiculous. Certainly an increasing number mobiles will include a music player. But the love affair with convergence is way over blown, in our opinion. Nonetheless, an iPhone and possibly an MVNO Apple carrier network are on the way if the cryptic remarks of Oppenheimer, during the conference call actually signal an Apple product of the future," he wrote.

But notebook sales were the jewel in the crown of Apple's third quarter performance. Revenue from the sales of MacBook and MacBook pro notebooks jumped 61 per cent to $1.16 billion from the year-ago quarter,

Wolf observed: "The stunning news in the quarter was the shipments of notebooks," he wrote. "Shipments came in at 800,000, up 61 per cent, despite the fact that the new MacBook was introduced halfway through the quarter.  In our opinion it's the best Mac yet in terms of price/performance."

Shannon Cross of Cross research told Reuters: "It shows the importance of the notebook line in their business and the diversity of their product set. People are looking more at the Mac story and that's where the vast opportunity really lies."

American Technology Research analyst Shaw Wu also waxed lyrical on Apple's performance. Repeating his 'Buy' rating on the stock, the analyst holds a $75 price target.

Noting that the Mac unit sales were a "surprise", he said: "The Mac business is showing signs of re-acceleration with the Intel transition about 75% complete and iPod demand remains relatively healthy, despite fears to the contrary. We continue to believe that new iPod nano refreshes will most likely occur between September to October."

Credit Suisse raised its earnings-per-share (EPS) on Apple's stock from $2.14 from $2.04, repeating its "outperform" rating on the shares.

S&P Equity Research also raised its EPS, repeating a "strong buy" rating and raising the target price by $3 to $75. "We strongly advise purchase, said S&P Equity Research analyst Richard Stice.

Deutsche Bank also raised its 2007 Apple estimates from $2.70 from $2.65 EPS.

Merrill Lynch also moved to upgrade Apple stock, from "neutral" to "buy" with a new $72 target price.

Apple shares are now worth $60.50 each, from $52.84 on Wednesday morning.