Apple Inc. (Nasdaq: AAPL) pleasantly surprised Wall Street by comfortably beating expectations when it reported earnings for its March quarter after the market close today (Wednesday).
The Cupertino, Calif.-based tech giant also threw existing holders of Apple stock several goodies, including an expansion of the stock buyback program, a seven-for-one stock split, and an 8% increase in the dividend.
The Apple stock buyback program will expand by $30 billion, to bring the total by 2015 to $130 billion.
The raft of happy news sent AAPL stock up more than 8% in after-hours trading.
Apple reported earnings per share of $11.62, a healthy $1.46 above the $10.16 analysts had forecast as well as the $10.09 reported in the same quarter a year ago.
Revenue was $45.6 billion, which was $2 billion above both the year-ago quarter and analyst expectations.
Another pleasant surprise was higher gross margins, which came in at 39.3%. That, too, beat the forecast of 37.7% as well as the year-ago quarter number of 37.5%.
The good news was almost entirely driven by surprisingly strong iPhone sales. Apple sold 43.7 million iPhones in the quarter, a 17% increase over the same quarter last year and far above the Street's number of 37.7 million.
That's a positive sign for the current quarter in that it shows demand for the iPhone remained high despite the lack of any updates and rumors of iPhone models with larger screens (a 4.7-inch and a 5.5-inch) expected to arrive in the fall.
The only other sector to shine in the March quarter was iTunes/Software and Services, which saw revenue rise 11% to nearly $4.6 billion.
Mac sales were nearly flat, rising 1% by revenue and 5% by units. Meanwhile, iPad revenue slumped 13%, with unit sales falling 16%.
Still, the Apple earnings report hit a lot more high notes than anyone expected, particularly with the stock buyback and dividend increase.
But while the stellar earnings report will push Apple stock higher in the short term, it will take more than that to sustain a push back to $600 and beyond.