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Apple earnings: Jim Cramer goes inside the surprise

On Wednesday shares of Apple surged almost 8 percent in the aftermarket, after the iPhone maker released quarterly results.

Effectively, Apple stunned the Street with its new and aggressive moves to return cash to shareholders.

"I don't know a soul who expected anything so shocking from Apple," said Cramer.

The Apple store on Fifth Avenue in New York City.
Getty Images
The Apple store on Fifth Avenue in New York City.

Apple approved another $30 billion in share buybacks through the end of 2015 and it also approved a roughly 8 percent increase in its quarterly dividend to $3.29 per share.

Activist investor Carl Icahn, who had famously called on the iPhone maker to boost its buyback program, tweeted his approval of the move on Wednesday.

But perhaps most surprising was the company's significant stock split.

"Apple's board authorized a rarely seen seven-for-one stock split," Cramer added. That was quite a surprise.

Although the split doesn't increase value per se, it makes each share more accessibly priced. And considering the public's ferocious appetite for Apple, shares that trade around $75 ($525 / 7) could generate a lot more interest from individual investors.

Confused? Think of it this way.

"When you divide an apple pie into seven slices, it doesn't make for more pie" Cramer said. "But it sure makes it more edible. And I believe Apple's stock will be more edible after the split is completed."

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Also Cramer said that iPhone sales presented a pleasant surprise.

"They were very good; 43.7 million units when analysts were looking for 37.7 million units," Cramer said.

Looking at the overall results, for the second quarter, Apple's net income rose to $10.22 billion from $9.55 billion in the year-ago period. However, Apple's per-share earnings jumped to $11.62 from $10.09 because the company's stock repurchase program decreased the pool of total shares.

Revenue rose to $45.6 billion from $43.60 billion in the same period a year earlier.

Analysts, on average, estimated that Apple would post earnings of $10.18 per share on revenue of $43.53 billion, according to Thomson Reuters.

All told, you get these kinds of shareholder friendly initiatives and solid results and "it ignites an otherwise dormant stock. Positive surprises tend to do that," Cramer said.

Read MoreApple spikes 8% on earnings beat, stock split

Reuters contributed to this report
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