APPLE CEO Tim Cook said the company expects US tariffs to slap an extra $900 million onto its costs this quarter.
Cook revealed the tech giant raked in $95.4 billion in revenue last quarter but warned that tariffs could soon impact its bottom line.
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Cook said Donald Trump’s tariffs had a “limited impact in the March quarter, due to optimizations of our supply chain and inventory” during Apple’s earnings release on Thursday.
But he warned that the trade environment may change.
Cook noted the company expects a greater impact from tariffs in the next quarter.
He said: “Assuming the current global tariff rates, policies, and applications do not change for the balance of the quarter, and no new tariffs are added, we estimate the impact to add $900 million to our costs.”
During the analyst Q&A, Cook said that “build-ahead in the manufacturing purchase obligations” could benefit the company in the June quarter.
He said it would be “difficult to predict” the impact of tariffs and policy past the June quarter.
Apple’s CFO Kevan Parekh said the company believes revenue will grow in the low to mid-single-digit percentage in its third quarter.
He noted the company’s outlook is based on the assumption that the global macroeconomic environment remains stable.
Cook said the company does not believe there was any pull-forward in demand during March ahead of the April 2 tariffs.
He also talked about plans to expand in the US, with Apple set to spend $500 billion over the next four years to build facilities in several states.
The tech giant reported services revenue of over $26.6 billion – a new all-time high and a 12 percent increase year-over-year.
Earnings per share rose 8 percent to $1.65, marking a record for a March quarter.
Overall revenue grew 5 percent compared to the same period last year, reaching $95.4 billion.
Parekh said: “Thanks to our high levels of customer loyalty and satisfaction, our installed base of active devices once again reached a new all-time high across all product categories and geographic segments.”
It comes as Apple arranged last minute flights to transport 600 tons of iPhones to the US from India to get ahead of Trump’s tariffs.
The American tech giant reportedly chartered flights for 1.5 million phones.
Apple lobbied Indian airport authorities to slash time in customs at Chennai airport in south India down from 30 hours to just six, Reuters reported.
Six cargo jets with a capacity of 100 tons have flown out since March, the source and an Indian government official said.
An iPhone 14 and its charging cable weighs around 350 grams in packaging, based on Reuters measurements, which suggests the ferried cargo could include up to 1.5 million iPhones.
Meanwhile, analysts have warned that the price of smartphones could soar to eye-watering levels as China faces a huge 125 percent tariff rate.
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