Cook warns on tariff costs, but iPhone sales drive growth
The tariffs, a key element of U.S. President Donald Trump's trade policy, had already cost Apple $800 million in the June quarter. Cook acknowledged that the uncertainty around tariffs led some customers to purchase iPhones earlier than usual this year, a factor that contributed to Apple's fiscal third-quarter results beating analyst estimates by the widest margin in at least four years, according to LSEG.
For the quarter ended June 28, Apple reported revenue of $94.04 billion, up nearly 10 percent from a year earlier and above the $89.54 billion analysts had forecast. Earnings per share were $1.57, compared with expectations of $1.43. Looking ahead, Chief Financial Officer Kevan Parekh said Apple anticipates "mid to high single digit" revenue growth in the September quarter, stronger than analysts' projection of 3.27 percent growth to $98.04 billion.
Shares of the Cupertino, California-based company rose three percent in after-hours trading after the forecast.
iPhone sales, Apple's most important business line, rose 13.5 percent to $44.58 billion, surpassing estimates of $40.22 billion. The company has been diversifying its supply chain, sourcing iPhones from India and manufacturing other products such as Macs and Apple Watches in Vietnam, to reduce exposure to tariffs. Sales in the Americas, Apple's largest market, grew 9.3 percent to $41.2 billion, while Greater China sales reached $15.37 billion, up from a year earlier and above Visible Alpha's consensus estimate of $15.12 billion. That performance reversed a decline in the previous quarter, supported in part by Chinese government subsidy programs that boosted smartphone sales.
Cook told analysts that Apple saw seasonal records for upgrades of iPhones, Macs, and Apple Watches during the quarter. He estimated that about one percentage point of the company's 9.6 percent revenue growth came from customers accelerating purchases ahead of potential tariff hikes.
The tariff outlook remains unsettled. While many Apple products are currently exempt, Washington is still negotiating with both China and India, and Trump has warned India could face tariffs of up to 25 percent. Analysts said that even if such duties are imposed, Apple's long-term production shift to India could help mitigate cost pressures.
Despite the strong quarter, Apple faces several challenges. Its stock is down 17 percent in 2025, underperforming technology peers such as Microsoft and Nvidia, whose valuations have surged on enthusiasm for artificial intelligence. Investors have expressed concern over Apple's slower integration of AI features compared with rivals. Cook confirmed that the company has delayed the launch of an AI-enhanced version of Siri but said Apple is "making good progress on a personalized Siri" and is expanding investments in artificial intelligence.
Apple's services business, which includes the App Store, music, and cloud storage, reported $27.42 billion in sales, ahead of expectations of $26.8 billion. Wearables revenue was $7.4 billion, short of the $7.82 billion forecast, while Mac sales reached $8.05 billion, above the $7.26 billion estimate. iPad sales totaled $6.58 billion, below the $7.24 billion analysts expected.
Gross margins in the June quarter were 46.5 percent, exceeding expectations of 45.9 percent. For the September quarter, Apple forecast margins between 46 percent and 47 percent, which was also above consensus.
Cook summarized the company's strategy by saying that Apple's approach to AI and other technologies remains focused on accessibility and ease of use, emphasizing that this philosophy "is at the heart of our AI strategy."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
7 minutes ago
- Globe and Mail
Roku's Stock Buyback Program: Potential Risks and Uncertain Impact on Investor Confidence
Roku Inc. (ROKU) has disclosed a new risk, in the Share Price & Shareholder Rights category. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Roku Inc. faces a significant risk with its stock repurchase program, as the company has no obligation to repurchase a specific amount or number of shares, and the program can be altered or terminated at any time. This uncertainty may lead to increased volatility in the trading price of its Class A common stock, potentially affecting investor confidence. Furthermore, the repurchase activities could deplete cash reserves needed for operational and strategic initiatives. Consequently, the program's impact on long-term stockholder value remains uncertain, posing a risk to the company's financial stability. The average ROKU stock price target is $104.11, implying 30.17% upside potential. To learn more about Roku Inc.'s risk factors, click here.
Winnipeg Free Press
3 hours ago
- Winnipeg Free Press
Asian markets are mixed after Wall St tumbles following poor US jobs report
BANGKOK (AP) — Shares in Asia are mixed after Wall Street had its worst day since May following the release of weak U.S. jobs data. Markets in Asia had already reacted on Friday to U.S. President Donald Trump's announcement of sweeping tariffs on imports from many U.S. trading partners, posting moderate losses. The new import duties are set to take effect on Thursday. Tokyo's Nikkei 225 index lost 1.6%, bouncing back from bigger losses, to 40,134.97. The Hang Seng in Hong Kong edged 0.2% higher, to 24,589.21, while the Shanghai Composite index was nearly unchanged at 3,562.18. In South Korea, the Kospi surged 0.7% to 3,140.92. Australia's S&P/ASX 200 shed 0.2% to 8,643.00. Investors' worries about a weakening U.S. economy deepened after the latest report on job growth in the U.S. showed employers added just 73,000 jobs in July. That is sharply lower than economists expected. The Labor Department also reported that revisions shaved a stunning 258,000 jobs off May and June payrolls. 'The labor market, once a pillar of resilience, is now looking more like a late-cycle casualty, as soft data begin to replace soft landings in market discourse,' Stephen Innes of SPI Asset Management said in a commentary. U.S. futures edged 0.3% higher, however, early Monday. On Friday, the S&P 500 fell 1.6%, its biggest decline since May 21 and its fourth straight loss. It closed at 6,238.01, posting a 2.4% loss for the week. The Dow Jones Industrial Average fell 1.2% to 43,588.58, while the Nasdaq composite fell 2.2% to finish at 20,650.13. Internet retail giant Amazon fell 8.3%, despite reporting encouraging profit and sales for its most recent quarter. Technology behemoth Apple fell 2.5% after also beating Wall Street's profit and revenue forecasts. Both companies face tougher operating conditions because of tariffs, with Apple forecasting a $1.1 billion hit from the fees in the current quarter. Trump's decision to order the immediate firing of the head of the government agency that produces the monthly jobs figures raised concern over whether there might be interference in future data. The surprisingly weak hiring numbers led investors to step up their expectations the Federal Reserve may cut interest rates in September. The yield on the 10-year Treasury fell to 4.21% from 4.39% just before the hiring report was released. That's a big move for the bond market. The yield on the two-year Treasury, which more closely tracks expectations for Fed actions, plunged to 3.68% from 3.94% just prior to the report's release. The Fed has held rates steady since December. A cut in rates would give the job market and overall economy a boost, but it could also risk fueling inflation, which is hovering stubbornly above the central bank's 2% target. An update on Thursday for the Fed's preferred measure of inflation showed that prices ticked higher in June, rising to 2.6% from 2.4% in May. Monday Mornings The latest local business news and a lookahead to the coming week. The Fed held rates steady again at its most recent meeting this week. Fed Chair Jerome Powell has been pressured by Trump to cut the benchmark rate, though that decision isn't his to make alone, but belongs to the 12 members of the Federal Open Market Committee. Businesses, investors and the Fed have been operating under a cloud of uncertainty from Trump's tariff policy. Companies have been warning investors that unpredictable policies, with some tariffs already in effect while others change or get extended, make it difficult to plan ahead. Walmart, Procter & Gamble and many others also have warned about import taxes raising costs, eating into profits and raising prices for consumers. In other dealings early Monday, U.S, benchmark crude oil lost 18 cents to $67.15 per barrel. Brent crude, the international standard, fell 23 cents to $69.44 per barrel. The U.S. dollar rose to 147.80 Japanese yen from 147.26 yen. The euro weakened to $1.1577 from $1.1598.
Canada News.Net
7 hours ago
- Canada News.Net
Cook warns on tariff costs, but iPhone sales drive growth
SAN FRANCISCO, California: Apple projected stronger-than-expected revenue for the current quarter ending in September, helping lift its shares in after-hours trading even as Chief Executive Tim Cook cautioned that U.S. tariffs could add US$1.1 billion in costs during the period. The tariffs, a key element of U.S. President Donald Trump's trade policy, had already cost Apple $800 million in the June quarter. Cook acknowledged that the uncertainty around tariffs led some customers to purchase iPhones earlier than usual this year, a factor that contributed to Apple's fiscal third-quarter results beating analyst estimates by the widest margin in at least four years, according to LSEG. For the quarter ended June 28, Apple reported revenue of $94.04 billion, up nearly 10 percent from a year earlier and above the $89.54 billion analysts had forecast. Earnings per share were $1.57, compared with expectations of $1.43. Looking ahead, Chief Financial Officer Kevan Parekh said Apple anticipates "mid to high single digit" revenue growth in the September quarter, stronger than analysts' projection of 3.27 percent growth to $98.04 billion. Shares of the Cupertino, California-based company rose three percent in after-hours trading after the forecast. iPhone sales, Apple's most important business line, rose 13.5 percent to $44.58 billion, surpassing estimates of $40.22 billion. The company has been diversifying its supply chain, sourcing iPhones from India and manufacturing other products such as Macs and Apple Watches in Vietnam, to reduce exposure to tariffs. Sales in the Americas, Apple's largest market, grew 9.3 percent to $41.2 billion, while Greater China sales reached $15.37 billion, up from a year earlier and above Visible Alpha's consensus estimate of $15.12 billion. That performance reversed a decline in the previous quarter, supported in part by Chinese government subsidy programs that boosted smartphone sales. Cook told analysts that Apple saw seasonal records for upgrades of iPhones, Macs, and Apple Watches during the quarter. He estimated that about one percentage point of the company's 9.6 percent revenue growth came from customers accelerating purchases ahead of potential tariff hikes. The tariff outlook remains unsettled. While many Apple products are currently exempt, Washington is still negotiating with both China and India, and Trump has warned India could face tariffs of up to 25 percent. Analysts said that even if such duties are imposed, Apple's long-term production shift to India could help mitigate cost pressures. Despite the strong quarter, Apple faces several challenges. Its stock is down 17 percent in 2025, underperforming technology peers such as Microsoft and Nvidia, whose valuations have surged on enthusiasm for artificial intelligence. Investors have expressed concern over Apple's slower integration of AI features compared with rivals. Cook confirmed that the company has delayed the launch of an AI-enhanced version of Siri but said Apple is "making good progress on a personalized Siri" and is expanding investments in artificial intelligence. Apple's services business, which includes the App Store, music, and cloud storage, reported $27.42 billion in sales, ahead of expectations of $26.8 billion. Wearables revenue was $7.4 billion, short of the $7.82 billion forecast, while Mac sales reached $8.05 billion, above the $7.26 billion estimate. iPad sales totaled $6.58 billion, below the $7.24 billion analysts expected. Gross margins in the June quarter were 46.5 percent, exceeding expectations of 45.9 percent. For the September quarter, Apple forecast margins between 46 percent and 47 percent, which was also above consensus. Cook summarized the company's strategy by saying that Apple's approach to AI and other technologies remains focused on accessibility and ease of use, emphasizing that this philosophy "is at the heart of our AI strategy."
