The company's escalating investment in its own stock also could increase the price by reducing the number of outstanding shares. That reduction increases earning per share, a key yardstick on Wall Street to appraise a company's value. Apple's market value currently stands at about $470 billion, more than any other publicly held company.
Since Apple's last split in February 2005, the stock has increased by nearly 12-fold. But CEO Tim Cook told analysts in a conference call that Apple's stock price “does not reflect the full value of the company.”
Apple's stock soared $41.40, or almost 8 percent, to $566.15 in extended trading after the news came out.
Activist investor Carl Icahn, who had spent months pressuring Apple to buy back more stock, was among those applauding the company's moves. In a Twitter post, Icahn said he is “extremely pleased” and reiterated his belief that Apple's stock remains “meaningfully undervalued.”
The results for the first three months of the year illustrated how Apple Inc. can afford to spend so much money on its own stock while also paying more than $11 billion in dividends annually.
The company ended the quarter with nearly $151 billion in cash, including $132 billion it is keeping overseas to lower its U.S. tax bill. The money being held outside the U.S. isn't available to buy back stock or pay shareholder dividends.
Apple's earnings rose 7 percent to $10.2 billion, or $11.62 per share, an amount that exceeds what most technology companies make in an entire year. Revenue climbed 5 percent to $45.6 billion. It represented the highest revenue that Apple has generated in any quarter occurring outside the holiday shopping season.
