CUPERTINO, Calif., April 24 (UPI) -- Apple reported a seven percent increase in quarterly profits, as the company continues to face increasing pressure in the smartphone market.
The company increased its share repurchase authorization by $30 billion to $90 billion and also increased its quarterly dividend by 8 percent. Apple said it was doing a seven-for-one stock split so that its shares would be available to a wider pool of people, potentially opening a path to listing on the Dow Jones Industrial Average.
Apple CEO Tim Cook said that the company felt its stocks were undervalued and that the increased stock buyback signaled the company's confidence in its future performance.
“Apple has created tremendous value for shareholders by developing great products that enrich people’s lives and that will always be our top priority and driving force,” Cook said. “The size of the share buyback increase is a signal of the board and the management team’s strong confidence in the future of Apple.”
Net income rose seven percent to $10.2 billion and sales rose 4.7 percent to $45.6 billion. Both figures were better than analysts had predicted. But after a decade of remarkable profits and growth, largely due to the return of Steve Jobs, the company's revenue and profits are flattening.
Apple is still heavily reliant on the iPhone, as reiterated by Cook in the conference call. Apple said it sold 43.7 million iPhone units in the three months ended March 29, far more than the 38.2 million predicted by analysts. Cook said that the company saw growth across its product line, including the iPhone 5C, and that the gains were bolstered by strength in many markets, such as China, Poland and Vietnam.
The iPhone has been losing ground slowly to phones running Google's Android operating system. Apple rival Samsung has also seen a dip in sales as other phone makers are providing cheaper phones with larger and larger screens.
Apple reported strong sales of its Apple TV set-top box that streams online video from iTunes and other services like Hulu and Netflix. The company has now sold 20 million units since 2007, with the set-top box generating revenues of $1 billion for the company last year.
Cook asserted that despite acquiring 24 companies in the last 18 months, these were small buys and nothing compared to what Google and Facebook were spending.
“We are not in the race to spend the most or acquire the most,” Cook said.