Apple splitting stock amid surge in iPhone sales
By Glenn Chapman ,AFP
April 25, 2014, 12:00 am TWN
SAN FRANCISCO -- 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 US$566.15 in after-market trade following the release of January-March earnings figures showing profit of US$10.2 billion on US$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 US$30 billion to buy back shares of the company's stock, taking to US$130 billion how much it plans to spend on repurchases and dividends by the end of next year.
Apple is pouring US$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 US$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."