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The Apple logo hangs in a glass enclosure above the 5th Avenue Apple Store in New York.Lucas Jackson/Reuters

Apple Inc. shares surged in after-hours trading after the company unveiled quarterly financial results that blew past expectations and announced aggressive new tactics to win back investors' affection.

A 17-per-cent jump in sales of the iPhone helped to boost profit at the Cupertino, Calif.-based tech giant to $10.2-billion (U.S.), or $11.62 a share, soundly beating analysts' expectations of about $10.18.

Chief executive officer Tim Cook said that Apple would boost its share buyback plan by $30-billion, to a total of $90-billion, and increase its dividend by about 8 per cent. He also pledged to increase the dividend every year, and said that Apple would split its stock seven-for-one in an attempt to make shares more affordable for small investors.

The bold moves seem designed to recharge enthusiasm for the stock. Apple's shares had slid 5 per cent this year before Wednesday's earnings announcement and the company had been the target of lobbying from activist investor Carl Icahn, who wanted the smartphone maker to increase its buybacks.

Mr. Icahn took to Twitter to tell followers he agreed with the buyback plan, and was "extremely pleased with the results." The shares jumped nearly 8 per cent in after-hours trading following the earnings announcement.

Apple executives said they believe their shares to be undervalued at current prices.

"We are very confident in Apple's future, and we believe our current stock price doesn't reflect the full value of the company," chief financial officer Peter Oppenheimer said on the conference call following the earnings announcement.

The iPhone, which makes up more than half of the company's total revenue, was a bright spot for Apple. Sales of 43.7 million devices in the first three months of the year set a fiscal second-quarter record.

The iPhone also continued to perform "exceptionally well in many developing markets. In greater China, Brazil, Indonesia, Poland and Turkey, iPhone sales grew by strong double digits year-over-year, and in India, Vietnam, sales more than doubled," Mr. Cook said.

But it was a sleepy quarter for new products, with no major devices launched. Apple has been rumoured to be working on a wrist-worn "smartwatch" and an iPhone with a larger screen, but those devices now seem unlikely to appear until the latter half of the year.

Apple's management team said the company would prioritize being the best, rather than the first, when it comes to launching new products.

"When you care about every detail and getting it right, it takes a little longer to do that," Mr. Cook said, adding that customers don't expect Apple to be the first to market with unique products. "They want great. Insanely great. And that's what we want to deliver," he said.

Sales of iPads fell short of analyst expectations at 16.4 million units sold, but Apple shrugged off the drop as a temporary aberration.

"We continue to believe that the tablet market will surpass the PC market in the coming years," Mr. Cook told analysts.

Sales of iPad in the quarter surpassed Apple's own estimates, and the company said that the apparent 16-per-cent drop in units was heavily influenced by inventory channel changes.

Both categories recorded a steep decline from the first quarter, when sales volumes of both iPhones and iPads hit record levels as they benefited from strong sales during the holiday period.

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