Apple to Split Stock 7 For 1, Raise Dividend
UPDATED: After-hours trading was halted shortly after the company reported strong quarterly earnings. When trading resumed, the stock surged 8 percent.
Apple will split its shares seven for one, the tech giant said Wednesday.
The announcement coincided with the release of fiscal second-quarter earnings results that blew past the expectations of analysts.
Apple earned $11.62 per share, excluding some items, on $45.6 billion in revenue while it was expected to earn $10.19 per share on $43.7 billion revenue. In the same quarter a year ago, Apple earned $10.09 a share on revenue of $43.6 billion.
Apple stock is up 33 percent in the past 12 months but down 6 percent so far this year and on Wednesday it closed 1 percent lower at $524.75.
After-hours trading of the stock was temporarily halted after news of the split and a strong earnings report; when trading resumed the shares quickly surged 8 percent.
The company also said it intends on returning $130 billion to shareholders by the end of 2015, by way of a $90 billion stock repurchase program -- an increase of $30 billion over the previous program -- as well as an 8 percent increase in its quarterly dividend. It also said it plans to increase its dividend on an annual basis.
Apple said Wednesday it will pay a dividend of $3.29 per share this quarter, and it will distribute about $11 billion in dividend payments this year. "Apple is among the largest dividend payers in the world," the company said in a press release Wednesday.
The company said it sold 43.7 million iPhones while analysts expected 37.7 million in the fiscal second quarter. The one area in which the company fell short was iPad sales, moving 16.4 million units while analysts were predicting 19.7 million.
During a conference call with analysts, CEO Tim Cook acknowledged that iPad sales weren't something everyone is "thrilled with," even though it is the fastest-growing product in Apple's history with more than 210 million units sold since its launch four years ago.
"I am very bullish on iPad," Cook said.
As is customary, Cook avoided spilling any details about new devices that are in the works, even as rumors spread Wednesday that a new version of Apple TV compatible with Siri voice control is in the pipeline.
Asked about Apple TV during the conference call, Cook said: "We continue to make the product better and better."
He added that about 20 million Apple TV units have been sold thus far and that in 2013 the device contributed about $1 billion in revenue, when the sale of television content is factored in.
Executives are expected to unveil some of Apple's newest products on June 2 at the Apple Worldwide Developers Conference.
June 2 is also the day Apple will split its shares seven for one.