UPDATE 6-Apple holiday quarter shines, shares surge

* Q1 EPS $6.43 vs Street view $5.40

* Q1 rev $26.7 bln vs Street view $24.4 bln

* Q2 outlook above Street targets

* Shares up 4 pct (Updates with EPS comparison, share price, details from report)

By Gabriel Madway

SAN FRANCISCO, Jan 18 (Reuters) - Apple Inc (AAPL.O) reported better-than-expected results, fueled by blockbuster holiday sales of the iPhone and iPad that may help ease investor concern about Chief Executive Steve Jobs' decision to take medical leave.

Shares in Apple, halted before the release, leapt 4 percent to about $354 after-hours, from a regular-session close of $340.65.

Apple's show of strength came as Wall Street displays increasing confidence in the management team surrounding Jobs, who seeks medical treatment for an unspecified condition and for an indefinite time. [ID:nSGE70G0AY]

Investors were widely expecting a strong performance from Apple over the holidays, and the company did not disappoint.

All key product lines exceeded expectations. The company sold 16.2 million iPhones in the quarter, up 86 percent. Apple also had strong sales of 7.33 million iPads, and Mac sales rose 23 percent on a unit basis to 4.1 million units.

Apple reported earnings for the fiscal first quarter ended Dec. 25 of $6 billion, or 6.43 cents a share, up 78 percent from a year-ago net profit of $3.4 billion, or $3.67 a share.

Analysts on average were expecting a profit of $5.40 a share, according to Thomson Reuters I/B/E/S.

Revenue rose 71 percent to $26.7 billion, much better than Wall Street's forecast for revenue of $24.4 billion.

Apple, which is known for its conservative forecasts, issued an outlook that was above analysts' targets. It expects earnings for the March quarter of $4.90 a share on revenue of $22 billion.

Wall Street is predicting a profit of $4.47 a share on revenue of $20.8 billion.

(Reporting by Gabriel Madway; Editing by Richard Chang)