Apple reported a 92 percent surge in profit today on the back of potent demand for the company's iPod line of portable music players.

But shares in the company dropped more than 4 percent in after-hours trading as Apple's forecast for its current fiscal quarter fell short of Wall Street expectations.

For the quarter ended December 31, Apple reported a profit of $565 million, or 65 cents a share, a 92 percent spike from $295 million, or 35 cents a share, for the same period a year ago.

"We are thrilled to report the best quarter in Apple's history," Apple chief Steve Jobs said in a statement.

At its Macworld conference in San Francisco earlier this month, Jobs had already publicized the company's quarterly revenue of $5.75 billion, up 63 percent from $3.49 billion in the same quarter a year ago.

The company has sold 42 million iPod units since its launch in 2001, 32 million of which were sold in 2005. Last quarter alone, Apple sold 14 million iPod devices, up from 4.5 million in the same period of 2004.

"We're particularly proud of our execution given that we replaced two of our three iPod lines, including the highest-volume iPod Mini line, as we entered the holiday season," company CFO Peter Oppenheimer said on a conference call. "Customer reaction to both the iPod Nano and the fifth-generation iPod was stunning."

The company did admit that iPod channel inventories were lower than it would have liked, with the 4GB Nano seeing the greatest bottleneck. Company officials said approximately 35,000 retail outlets are selling at least one type of iPod.

At Macworld, Jobs noted that the iTunes Music Store has sold 850 million downloads to consumers, indicating a whopping 83 percent market share among all download services. Oppenheimer said iTunes by itself is operating "above break even."

Since it launched its video-download service through iTunes in October of last year, Apple has sold 8 million video segments.

Apple's music-related business accounted for 59 percent of the company's total revenue and was up 145 percent compared to same period a year ago.

"The music business was a much higher percentage of our total business in the December quarter than it had previously been before," company COO Tim Cook said on the conference call.

Apple officials said the company's current fiscal quarter would bear revenue of about $4.3 billion and profit of about 38 cents a share. That outlook missed the consensus estimates of analysts surveyed by Thomson First Call, who projected Apple's revenue at $4.63 billion, with earnings at 48 cents a share.

As a result, shares in the company dropped more than 4 percent in after-hours trading, falling to $79.01 as of press time.