Apple on Thursday reported a smaller than expected decline in quarterly revenue, and Chief Executive Tim Cook said the company expects a return to sales growth in the current quarter as it invests in AI features to be unveiled in the coming months.

Apple increased its cash dividend by 4 percent and authorised an additional programme to buy back US$110 billion of its stock. The buyback is the largest in the company's history, according to Investing.com analyst Thomas Monteiro.

Shares of Apple surged roughly 7 percent in extended trade after the report.

Apple said fiscal second-quarter revenue fell 4 percent to US$90.8 billion, beating the average analyst estimate of US$90.01 billion, according to LSEG data.

For Apple's current quarter, which ends in June, Cook said the iPhone maker expects "to grow low-single digits" in overall revenue. Wall Street expects 1.33 percent revenue growth to US$82.89 billion, according to LSEG data.

Apple faces a raft of challenges across its business. Smartphone rivals such as Samsung Electronics have introduced competing devices aimed at hosting artificial-intelligence chatbots.

On the regulatory front, Apple's services business, which contains its lucrative App Store and was one of the few areas of growth in the fiscal second quarter, is under pressure from a new law in Europe. In the United States, the Department of Justice in March accused Apple of monopolising the smartphone market and driving up prices.

For the fiscal second quarter, IPhone sales fell 10.5 percent to US$45.96 billion, compared with analyst expectations of US$46 billion. Apple executives said in February that the year-ago fiscal second quarter had benefited from a US$5 billion surge in iPhone sales as the company caught up from supply-chain snarls during pandemic lockdowns.

Long considered a must-own stock on Wall Street, Apple shares have underperformed other Big Tech companies in recent months, falling 10 percent this year. (Reuters)