FORTUNE  — The numbers are in, and they’re surprisingly good. Stronger than expected iPhone sales seem to have boosted both the gross margin and the bottom line. iPad sales were a little weak, due largely to channel inventory changes. Mac sales were up and the iPod business, as expected, has pretty much collapsed. Apple press release.

In a separate press release, the company announced a 7 for 1 stock split, effective June 2, something that doesn’t change the math but which should make the stock affordable for more investors. The board of directors also increased its share repurchase authorization to $90 billion (from $60 billion) and declared a dividend of $3.29 per common share, an increase of about 8%, payable on May 15. 

The numbers:

  • Revenues: $45.642 billion, up 4.7% year over year
  • Profits: $10.223 billion
  • Earnings per share: $11.62, up 15%, well above consensus
  • Gross margin: 39.3% (well above guidance)
  • iPhones: 43.719 million units, up 17%, better than expected
  • iPads: 16.35 million, -16% (lower than expected)
  • Macs: 4.136 million, up 5%
  • iPods: 2.761 million, down 51% (as expected)
  • iTunes, Software and Services: $4.573 billion, up 11%
  • Accessories: $1.419 billion, up 3%
  • Revenue guidance for Q3: $36 to $38 billion
  • GM guidance: 37%-38%

“We’re very proud of our quarterly results, especially our strong iPhone sales and record revenue from services,” said Tim Cook. “We’re eagerly looking forward to introducing more new products and services that only Apple could bring to market.”

“We generated $13.5 billion in cash flow from operations and returned almost $21 billion in cash to shareholders through dividends and share repurchases during the March quarter,” said outgoing CFO Peter Oppenheimer. “That brings cumulative payments under our capital return program to $66 billion.”

Apple’s AAPL share closed Wednesday at $524.75. They popped more than $40 in after hours trading.

A conference call with analysts is scheduled to begin at 5:00 p.m. ET, 3:00 p.m. PT. Click here: Listen to the Webcast.

Below: the average estimates of 41 analysts in Fortune‘s poll.

Sales: $43.78 billion
EPS: $10.41
iPhones: 38.25 million units
iPads: 19.35 million
Macs: 4.09 million
iPods: 3.06 million
iTunes, software and services: $4.56 billion
Accessories: $1.40 billion
Gross margin: 37.8%

Below: Notes from the conference call.

Cook is “proactively” explaining why iPad sales look weaker than they were. Channel inventory, etc.

He’s happy with sales in China and Japan, where smartphone share has hit an “incredible” 55%.

Angela Ahrendts is coming on board as retail chief next week.

2/3 of iPad buyers were new to iPad, 1/2 of iPhone owners were new to iPhone.

Turns to capital return program: “Apple has created tremendous value for shareholders” (trademark Apple boilerplate). After a lot of throat clearing.

Mentions expansion into new categories, without specifics. Says bought 24 companies in the past 18 months.

Today increasing size of program to over $130 billion, expecting to end by end of 2015, as promised before. Most of it going to share repurchase because Apple thinks stock price doesn’t reflect value. Also increasing dividend for those shareholders who rely on dividends.

Turning over to Luca Maestri, the new CFO. Italian accent. He’s reading from the earnings report.

China Mobile and 4S sales led to record in China.

In Japan, iPhone sales up over 50% year over year.

Also well in developing markets, Poland, Turkey, India Vietnam.

15.4 million iPhones in inventory.

Enterprise market: 20,000 iPhones at Deutschbank.

Macs gained share for 31 of the past 32 quarters.

iPad: iPad results were “heavily influenced” by channel inventory: Shipped 16.4 million, sold through 17.5 million (last year it was the other way around).

Summarizes capital program. Bottom line: They’re buying Apple stock as fast as they can.

Cook saying goodbye to Peter Oppenheimer, who never missed guidance in 10 years as CFO.

Q&A starting.

Maestri attributes strong GM to favorable mix and lower guidance to less favorable mix. (That usually means lots of high-margin iPhone sales.)

Cook says seeing the largest smartphone market share in BRIC countries “than we’ve ever seen.”

In question about carrier upgrade policies, Cook stresses need to get new people into the Apple ecosystem and keeping them there.

Repeating “make great products” mantra.

More on the iPad from Tim, asked why sales are basically flat year over year, even accounting for inventory stuff.

He’s pitching hard. Apple’s fastest growing product ever (that’s ducking the question).

iPads in schools. “I believe the match has been lit. And that it’s very clear that student achievement is higher with iPad in the classroom.” (That’s not what I hear from teachers.)

46% tablet share according to NPD (U.S. only). He says that includes products that aren’t comparable. “Office I believe does help. If it would have been done earlier, it would have been better for Microsoft, frankly.”

Customer satisfaction is 98% — “there’s almost nothing in the world with a 98 sat.”

“When I back up from all of these I feel great.” That doesn’t mean that every quarter is going to be great.

Of course the things that drive us are the next iPads, if you will. (Not clear if he means new categories or incremental improvements.)

“I am very bullish on iPad.”

Q about Google, Facebook, Amazon and how they’re diversifying fast. Why isn’t Apple?

Cook: The key thing for us is to stay focused on things that we can do best. We feel comfortable in expanding the things we do — but we’re not ready to pull the string on the curtain.

When you care about every detail and getting it right, it takes longer to do that. We didn’t ship the first MP3 player, nor the first smartphone, nor the first tablet.

It means much more to us to get it right than to be first.

Customers at the end of the day don’t care about first. They care about great.

We are not in a race to spend the most or acquire the most. We’re in a race to be the best.

Asked about smartphone competitors. Cutting prices, acquisitions.

Cook: A lot of people giving up. The part of the market that we’re interested in is the part tat really wants the best smartphones. We have smartphones that go down to a reasonable price. I think this Q if you were unsure that we’ve demonstrated that we can do well in a number of markets — developing and developed.

Rattles off the emerging countries where sales were up double digits.

Re China, we literally did well in every category in China. It wasn’t just that we signed as deal with the biggest carrier.

62% of people who bought the iPhone 5S in China switched from Android

60% 5C switched from Android

Plan to triple the number of retail outlets in china in the next year. (presumably not Apple Stores)

Munster: Asking why he told shareholders that Apple TV is no longer a hobby.

Cook: Reason stripped off “hobby” label, when you look at sales of Apple TV box itself and the sales of content, that was over $1 billion. From investment pt of view, we continue to make the product better and better. We had HBO go on Apple TV, same on Amazon TV. They may have picked up some older content as well.

We’ve sold about 20 million Apple TVs. I’m feeling quite good about that business and where it can go.

That’s a wrap.

See also: