Apple splitting stock as iPhone sales soar

Apple on Wednesday courted investors with stock split plans as hot iPhone sales pushed up profits while underscoring pressure for the company to unveil "the next big thing." Apple shares jumped more than seven percent to $566.15 in after-market trade following the release of January-March earnings figures showing profit of $10.2 billion on $45.6 billion in revenue. The earnings report came with Apple chief Tim Cook hinting that new products are on the way from the maker of iPhones, iPads, iPods, and Macintosh computers. "We're very proud of our quarterly results, especially our strong iPhone sales and record revenue from services," Cook said in a press release. "We're eagerly looking forward to introducing more new products and services that only Apple could bring to market." - Share buy-back boosted - Apple will spend an additional $30 billion to buy back shares of the company's stock, taking to $130 billion how much it plans to spend on repurchases and dividends by the end of next year. Apple is pouring $90 billion into buying back shares because it believes the stock is undervalued in the market, according to executives. "We’re confident in Apple's future and see tremendous value in Apple's stock, so we’re continuing to allocate the majority of our program to share repurchases," Cook said. "We’re also happy to be increasing our dividend for the second time in less than two years." Apple will raise its quarterly dividend to $3.29 per common share and said it plans to bump up the figure annually. Its board endorsed a seven-for-one stock split, with each shareholder of record as of June 2 receiving six additional shares for each one they hold. "We are taking this action to make Apple stock more accessible to a larger number of investors," Cook added. Forrester analyst Frank Gillett said the earnings showed a company "chugging along" on proven products but under pressure to rock the world with another innovation. "We are ready," Gillett said. "It is time for Apple to show us something from their labs; from behind their closed doors." - Innovations in the works - While iPhone sales handily beat Wall Street expectations in the quarter, the performance underscored how heavily Apple's revenue relies on its hit smartphones, according to Gartner analyst Van Baker. Powerful iPhone sales figures also offset "less than stunning" iPad sales, the analyst noted. "Apple's dependence on the iPhone is even higher than it used to be," Baker said. "It is even more important to bring some new products." Baker said that financial guidance for the current quarter didn't indicate that Apple was poised to launch a major new product, pushing any potential unveilings into the final three months of this year. Rumors regarding what Apple may introduce as its "next big thing" have included an Internet-linked smart watch and a revamped Apple TV home entertainment box and service. "We currently feel comfortable in expanding the number of things we are working on," Cook said during an earnings call when asked about Apple diversifying its offerings. "We have been doing that in the background and are not ready yet to pull the string on the curtain." There remains tremendous room for growth in the smartphone market, and iPhones did well in the opening quarter of the year across the range of geographies from mature to developing, according to Cook. Apple reported that sales of iPhones in China climbed to an all-time quarterly high, with a flood of first-time buyers lured away from smartphones powered by Google-backed Android operating software. And while the growth if iPad sales slowed in the quarter, the Apple tablets were touted as a rare simultaneous "instant hit" in the consumer, business and education markets. "It has been the fastest growing product in Apple's history," Cook said of iPad, noting that the company has sold more than 210 million of the tablet computers since they were introduced. "I feel great," Cook said of iPad's progress. "That doesn't mean that every 90 days there is going to be a number everybody is thrilled with; what it means is that over time the iPad figure looks very good."