San Francisco — Apple on Thursday reported outcomes that narrowly beat Wall Avenue expectations as customers stocked up on iPhones amid fears of potential import taxes on its signature machine from US President Donald Trump.
The Cupertino, California-based firm stated its gross sales and revenue for the fiscal second quarter ended March 29 had been $95.36bn, in contrast with analyst estimates of $94.68b, in response to LSEG information. Gross sales of iPhones had been $46.84bn, in contrast with estimates of $46.17bn, in response to LSEG information.
Apple shares had been down 2.4% in after-hours buying and selling after the outcomes had been launched.
Whereas the outcomes had been higher than analysts had anticipated, traders are targeted on how tariff considerations will play out within the coming quarter.
“The corporate’s proposed manufacturing shift to India raises urgent questions on execution timeline, capability limitations, and doubtlessly unavoidable price will increase that can shrink margins, be handed to customers, or have a mixture of penalties,” Emarketer analyst Jacob Bourne stated.
The Trump administration has to this point spared electronics from tariffs, however Washington has signalled that some levies may come within the weeks forward. The uncertainty has despatched shares of Apple, which makes 90% of its merchandise in China, down about 15% this yr, wiping off greater than $600bn from its market worth.
Microsoft’s upbeat forecast took its market capitalisation to $3.2-trillion, beating Apple to clinch the highest spot.
Apple will attempt to mitigate tariffs by shifting manufacturing of US-bound iPhones to India, Reuters has reported.
Analysts anticipate the corporate to unfold among the tariff prices via its provide chain, whereas preserving value will increase to a minimal to keep away from dropping market share at a time when it faces fierce competitors and has skilled delays in rolling out key synthetic intelligence (AI) options corresponding to enhancements to its Siri voice assistant.
Apple CEO Tim Cook dinner stated on Thursday that iPhone stock ranges in the beginning and finish of the fiscal second quarter had been comparable, that means there was no giant stock build-up over the interval.
Cook dinner stated handset gross sales had been boosted by the iPhone 16e, the corporate’s $599 mid-market mannequin that incorporates its first customized modem chip.
The iPhone 16 is Apple’s most cheap mannequin however has a sufficiently highly effective processor to run all the firm’s latest AI options.
“Whenever you have a look at the energetic (iPhone) put in base, it did hit a brand new excessive, and did so in each geographic area,” Cook dinner stated.
Apple stated gross sales in its Better China section fell to $16bn, higher than analyst expectations of $15.9bn, in response to information from Seen Alpha. In China, Apple has confronted particularly powerful competitors from home makers corresponding to Huawei and Xiaomi and has not but rolled out key AI options that had been introduced practically a yr in the past.
Reuters earlier reported that Apple has partnered with Alibaba to offer AI options in China, however Apple has nonetheless not signalled when these options will grow to be obtainable.
Apple stated gross sales in its providers enterprise had been $26.65bn, in contrast with estimates of $26.69bn, in response to LSEG information. Cook dinner stated Apple now has greater than 1-billion paid subscriptions on its platform.
In Apple’s equipment and wearables section, which incorporates merchandise corresponding to AirPods, income was $7.52bn, in contrast with estimates of $7.85bn, in response to LSEG.
Gross sales of iPads and Macs had been $6.40bn and $7.95bn, respectively, in contrast with analyst expectations of $6.07bn and $7.92bn. Cook dinner stated entry-level iPads carried out one of the best through the quarter.
Apple additionally stated it is going to enhance its money dividend by 4% to 26c per share and that its board has authorised an extra $100bn for its inventory buyback programme.
Reuters
