Tech giant Apple chose a bombshell solution to the problem of its struggling share price, launching a full-on charm offensive to win over investors with a financial candy basket of stock splits and huge dividend increases to win back those who may have been disillusioned by the company's lagging growth.



In the first three months of the year, Apple grew its revenue to $45.6bn, well above analysts expectations of $43.5bn in revenue for the first three months of the year.

Among the biggest of Apple's moves was a seven-for-one stock split so that every investor will get six additional shares. Apple has done stock splits before – in 1987, 2000 and 2005 – but they have been on a much smaller scale. The company has done only two-for-one stock splits in the past, meaning that investors received two shares for every one they owned.

On news of the stock split, Apple's stock rapidly jumped 8% – or $42 – in after-hours trading, landing at $566 before the stock was halted.



Apple also offered another palliative to investors by growing its spending on dividends and share buybacks by one-third to $130bn. Stockholders like dividends because they promise easy and reliable income, and Apple is already generous, raising its dividend twice in two years and paying $11bn annually to its shareholders.



Investors like share buybacks because it allows them to get premium prices for their stock; it also means companies use their cash, which otherwise lays fallow unless it is invested somewhere.



"We are planning for annual dividend increases," promised CEO Tim Cook on a conference call with investors.



The stock split, which comes as a shock, will achieve several of Apple's financial goals to please investors, who have been looking to the company to dazzle with new product offerings. including creating more buzz around the stock and making it easier for small investors to buy shares of the company, which will now be cheaper.



The split will also make it paradoxically more expensive for large investors to gain a large stake in the company, which may go towards some way towards fending off activist hedge fund managers like Carl Icahn and David Einhorn, who have dogged the company in recent years to force it to boost the price of its stock.



Icahn pushed the company to use some of its infamously large cash hoard of over $140bn to pay dividends and buy back its own stock. His efforts helped raise Apple's stock to $529, but that is still well below the peak of $702 in September 2012.



While Apple has successfully faced down those activist investors – who were looking to change the company’s use of its cash – the company has not dazzled on its growth or results.

Cook, for instance, made his now-customary promise that Apple is working on innovation: "The thing that drives us are the next iPads, if you will, the things in the pipeline."



"People want something great – insanely great," Cook said of the company's plans for acquisitions. "And that's what we want to deliver."



Apple in some ways may be a victim of its own success; analysts worry that the company's iPhone and iPad are so ubiquitous that they are reaching the saturation point where sales won't grow by much.



There's some evidence for those fears. In the first three months of the year, for instance, sales of the iPad tablet, at 16.4m units, slowed considerably – falling by 16% – and it was no longer selling out. Apple spent a good portion of its conference call with investors explaining the shortfall in expectations for the iPad and offering investors a pep talk about the tablet's future prospects.

"It's the only one of our products that was instantly a hit," Cook reminisced on the conference call, saying the company sold 210 iPads since the product's launch, which was twice as many as the company's iPhone sales and seven times as much as its sales of its music player, the iPod. Cook said Apple is focusing on getting the iPad into more classrooms all over the world.



"Virtually all of the Fortune 500 are using the iPad," Cook added about the iPad's use among corporate, or "enterprise", customers. "We have to focus on penetration – it has to be deeper and broader."