Fears that Apple has lost its innovative vigour have been put aside for the moment after the tech giant reported a bumper March quarter profit, with strong iPhone sales underpinning the result.

In another move that has pleased shareholders, CEO Tim Cook announced the business would return some of its huge cash reserves to owners.

Apple chief Tim Cook said the company sold 43.7 million iPhone units in the three months ended March 29, far surpassing analysts’ expectations of sales of 38.2 million units.

“We’re very proud of our quarterly results, especially our strong iPhone sales and record revenue from services,” Cook said in a press release.

“We’re eagerly looking forward to introducing more new products and services that only Apple could bring to market.”

While iPhone sales handily beat Wall Street expectations in the quarter, the performance underscored how heavily Apple’s revenue relies on its hit smartphones, according to Gartner analyst Van Baker.

Powerful iPhone sales figures also offset “less than stunning” iPad sales, the analyst noted.

“Apple’s dependence on the iPhone is even higher than it used to be,” Baker said.

“It is even more important to bring some new products.”

Share buyback

Apple plans to buyback an additional $32 billion of its stock and raise its quarterly dividend by eight per cent amid a slowdown in revenue growth.

Apple shares on Wednesday jumped more than 7 per cent to $610.68 billion in after-market trade after the release of January-March earnings figures showing profit of $11.02 billion on $45.6 billion in revenue.

The buyback commitment, announced on Wednesday as part of Apple’s fiscal second-quarter earnings report, expands on the company’s previous pledge to spend $60 billion on stock buybacks by the end of next year.

The company is now earmarking $90 billion for buybacks during that time frame as it believes the stock is undervalued.

Apple also is raising its quarterly dividend to $3.29 per share as part its effort to funnel more money to stock holders.

“We’re confident in Apple’s future and see tremendous value in Apple’s stock, so we’re continuing to allocate the majority of our program to share repurchases,” Cook said.

“We’re also happy to be increasing our dividend for the second time in less than two years.”

The buybacks will increase the price of remaining shares because there are fewer outstanding.

The slowdown in revenue growth has prompted investors to wonder whether the company has lost its innovative power since the death of Steve Jobs.