Apple defied predictions Tuesday when it posted better-than-expected earnings for the second quarter, helped by strong sales of the iPad and iPhone. It also gave shareholders something they had been clamoring for: more of its huge cash hoard.
The not-so-good-news was that its outlook fell short of expectations.
Apple reported fiscal second-quarter earnings of $10.09 a share on revenue of $43.60 billion. Apple sold 37.4 million iPhones in the quarter, compared with 35.1 million in the year-ago quarter. The tech company sold 19.5 million iPads versus 11.9 million a year earlier.
Analysts had expected the tech giant to report earnings excluding items of $10.00 per share on revenue of $42.33 billion, according to a consensus estimate from Thomson Reuters.
In the year-earlier quarter, Apple earned $12.30 a share on revenue of $39.19 billion.
"The March results were in line with our expectations. The bigger news, and what is driving the stock up 5 percent, is the big buyback announcement and Apple putting its big cash balance to use," said Morningstar analyst Brian Colello.
Apple also increased its dividend 15 percent to $3.05 a share and said it will expand its share repurchase program to $60 billion from the $10 billion level announced last year. That represents about $100 billion in cash to its shareholders over two years, as Apple heeds the clarion call from investors to do something with its $145 billion mountain of cash.
For the third quarter, Apple forecast revenue of between $33.5 billion and $35.5 billion, well below the $38.25 billion Wall Street was forecasting.
Reuters and NBC News' Patrick Rizzo contributed to this report.