Apple beats expectations and woos investors

Apple has reported first-quarter revenue of $45.6bn and profits of $10.2bn, beating expectations

Apple has reported revenue of $45.6bn and profits of $10.2bn for the first three months of the year, beating expectations.

The company also announced plans to buy back $30bn of its stock, increase its quarterly dividend by 8%, and split its stock seven-for-one in June for the first time in nine years.

“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 capital return programme to share repurchases,” said chief executive Tim Cook in a statement.

“We’re also happy to be increasing our dividend for the second time in less than two years,” he added.

Analysts said that because of slowing revenue growth, the moves are aimed at appeasing investors, who welcomed the news, driving shares up 8% in after-hours trading, reports the Telegraph.

The profits were mainly due to Apple’s sale of 43.7 million iPhones, which contributed to more than half the revenue.

Although iPhone sales were down 14% on sales of the previous quarter, they were up 17% compared with the same period the year before.

"We're very proud of our quarterly results, especially our strong iPhone sales and record revenue from services," said Cook.

But analysts warned that Apple’s increased dependence on the iPhone could be a problem.

“That ultimately presents a higher risk and adds pressure to bring new product categories to market", Gartner analyst Van Baker told Computer Weekly.

In an attempt to counter stiff competition from rival Samsung, Apple has acquired 24 companies in the past 18 months to expand its research and development into new features and products.

While the iPhone performed surprisingly well, sales of the iPad fell 16% compared with the same period a year ago.

In a conference call, Cook ascribed the fall to the way sales were calculated, noting that the iPad is the fastest selling product in Apple's history, with total sales of more than 210 million, reports the BBC.

But analysts said the iPad sell through was somewhat weak even considering the channel inventory adjustments Cook described.

Others have said that the poor performance of the iPad indicates that greater functionality is required if it is to replace the traditional PC and increase growth.

Total sales of Apple's iPod music player continued to decline sharply, falling to just 2.8 million units, a 54% decrease from the previous three-month period and 51% compared with the same period in 2013.

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