Apple Inc resets the clock as investors await next big thing after surprise iPhones sales announcement

Apr 24 2014, 11:36 IST
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To top it all off, Apple unveiled a 7-for-1 stock split that should go down well with individuals. (Reuters) To top it all off, Apple unveiled a 7-for-1 stock split that should go down well with individuals. (Reuters)
SummaryApple Inc surprised with news that it sold more iPhones in quarter than even the most bullish analysts expected.

Apple Inc just bought itself some much-needed time. On Wednesday, the company surprised Wall Street with news that it sold more iPhones in the March quarter than even the most bullish analysts had expected. It threw another $30 billion into an already sizeable stock buyback program and instituted an 8 percent quarterly dividend increase to boot. And profits rose by an unexpected 7 percent.

To top it all off, Apple Inc unveiled a 7-for-1 stock split that should go down well with individuals who want a piece of a household name but could not afford to fork over $500 a share.

The litany of positive numbers sent Apple's long-stagnant shares up 8 percent. But it masked a more fundamental concern that has kept the company's once-unstoppable share price in check for over a year: when will, or can, Tim Cook pull another gadget out of Apple's hat?

"Most people will be talking about the split, increased dividend and buyback. But the real focus for the company and the stock is what and when is the new category" of product coming, argued Hudson Square analyst Daniel Ernst.

"Being an Apple investor in the last couple of years has required patience. And that's something investors in the last 10 years have not had to have."

No one would argue that Apple has had a phenomenal run over the past decade - first with the iPod, then the iPhone in 2007, and finally the iPad in 2010. But now, as Google Inc spends billions to buy up technology from robotics to artificial intelligence, and Samsung Electronics Co Ltd and other Android-device makers swallow chunks of Apple's market share, some are impatient to see what Apple can come up with next.

Many Apple observers are betting on another successful emerging from its secretive labs in Cupertino, California in the second half of this year. Wednesday's strong showing will appease investors who want to see some stock action in the meantime, given Apple's stock has been stuck largely just above $500 for months.

"Agree completely with (Apple's) increased buyback and extremely pleased with results. Believe we'll also be happy when we see new products," tweeted billionaire activist Carl Icahn, who waged a Twitter campaign to get the iPhone maker to boost its buyback program.

FOR MY NEXT TRICK ...

That's not to say investors on Wednesday did not applaud a much healthier outlook for the company than was apparent in January,

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