Apple sold a record number of iPhones, more than 16 million between September and December 2010.

In a display of perfect timing, Apple blew past analyst expectations in reporting the best financial performance in its history today.

Apple reported revenue of $26.74 billion and profits of $6 billion, or $6.43 per share. Revenue was up 71 percent from a year ago, and earnings were up 78 percent. Analysts were expecting revenue of $24.38 billion and earnings per share of $5.38.

The company's gross margins dipped slightly to 38.5 percent compared with 40.9 percent a year ago, as Apple had forecast during the company's last earnings call.

The report followed news yesterday that CEO Steve Jobs will be taking an indefinite leave of absence from the company to focus on his ongoing health problems. He retains CEO duties, while COO Tim Cook will handle the day-to-day operations of the company. Apple included a quote from Jobs in the press release accompanying the earnings report today.

"We had a phenomenal holiday quarter with record Mac, iPhone, and iPad sales," Jobs said. "We are firing on all cylinders and we've got some exciting things in the pipeline for this year including iPhone 4 on Verizon which customers can't wait to get their hands on."

Apple shares opened down more than $20 this morning in the aftermath of Monday's revelation that Jobs would be taking a medical leave of absence. They rebounded to close down $7.83 at $340.65, and Wall Street responded warmly to the blow-out earnings report, sending shares up almost 2 percent to $342.07 in after-hours trading.

Apple said it sold 4.13 million Macs during the quarter, 23 percent more than the holiday quarter a year ago' 16.24 million iPhones, 86 percent better than a year ago' 19.45 million iPods during the quarter, down 7 percent from a year ago' and 7.33 million iPads.

Apple continued to put away cash, adding $9.8 billion during the quarter, putting its bank account balance at more than $60 billion.

Sales of the iPhone more than doubled from last year. CFO Peter Oppenheimer said on an earnings call with analysts that the company recorded $10.47 billion in revenue alone from the sale of iPhones and related accessories.

In its first holiday quarter, Apple was able to increase its supply of iPads, which had been problematic for the company since its debut in stores in April.

"We increased dramatically last quarter," Cook said. "That did get us into supply/demand balance and allowed us to expand to a total of 46 countires during the quarter and we're confident enough to add another 15 countries during January."

Oppenheimer said the company made $4.61 billion in revenue alone from the sale of iPad and iPad accessories.

Continuing close to where Jobs left off during the previous quarter's earnings call, Cook said he foresees little competition from Android tablets, especially the current crop that's shipping with versions of Android not optimized for tablets.

In that case, "You wind up with a scaled-up smartphone, which is a bizarre product in our view. It's hard for me to understand if somebody does a side-by-side (comparison) with an iPad, I think an enormous percentage of people are going to select an iPad. Those are not tablets we have any concern on," he said.

Cook is similarly unimpressed with the forthcoming Android 3.0 Honeycomb-based tablets announced earlier this month at CES.

"There's nothing shipping yet, so I don't know. Generally they lack performance specs, price, (shipping) timing. Today, they're vapor," said Cook. "We'll assess them as they come out. However, we're not sitting still. And we have a huge first mover advantage. We have an incredible user experience from iTunes to the App Store and enormous number of apps and a huge ecosystem, so we're very, very confident in entering in a fight with anyone."

When asked about whether the iPad is cannibalizing Mac sales, Cook said he assumes it is somewhat. But he added that he's confident that the "halo effect" that brought new Mac users to Apple once the iPod went mainstream would be repeated with the iPad.

"If the iPad or tablets do cannibalize the PC market, keep in mind we have low share in the PC market. The other guys will lose a lot more (share), and we have a lot more to win because of that," he said. "Cannibalization is not something we're spending one minute on here."

Apple's retail stores had their best quarter yet during the holiday shopping season, with revenue of $3.9 billion. Collectively, Apple Stores in China are the highest trafficked stores and have the highest average revenue of any of the company's retail outlets, according to Oppenheimer.

Though not asked directly, Cook subtly tried to quell any unspoken concerns analysts had over a possible future of Apple without Jobs during the call. His message was essentially "business as usual."

"We're very heavy with product pipeline. The team here has an unparalleled depth and breadth with talent and a culture of innovation that Steve has driven in the company," said Cook. "Excellence has become a habit. We feel very confident in the future of the company."

Updatd at 3:08 p.m. PT with details from the earnings call.