Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Apple unveiled robust revenue growth on Thursday as the company braces itself for a tumultuous few months of navigating the fallout from President Donald Trump’s tariff war with China.
The company reported revenue of $95.4bn for the quarter ending March 29, up 5 per cent year on year and slightly above consensus estimates of $94.6bn. Net income was $24.8bn, also slightly beating estimates of $24.5bn and up 5 per cent on the same period for the previous year.
The results reflect the period before Trump announced his “liberation day” tariffs on April 2, which sent Apple shares sliding. The iPhone-maker, with its supply chains concentrated in Asia, is heavily exposed to a trade war with China.
Revenue for the iPhone, Apple’s flagship product, was $46.8bn, up 2 per cent year on year.
China revenue fell slightly to $16bn, down 2.4 per cent, reflecting the competitive challenge Apple has faced from local smartphone makers in recent quarters. Its services business, which includes the App Store, iCloud and Apple Pay, continued to show strong growth, rising 12 per cent to $26.6bn.
Apple’s shares fell around 2 per cent in after-hours trading on Thursday.
Apple chief financial officer Kevan Parekh told the Financial Times there had been no sign of a short-term uptick in consumer demand to get ahead of the April tariffs.
“For the March quarter we don’t believe we saw any strong evidence of pull-ahead demand that impacted our results,” Parekh said.
Apple, he said, had been “working hard to optimise supply chain and inventory” during the quarter to mitigate the potential impact from tariffs.
In China, the company had seen an improvement from the previous quarter in its results, Parekh noted, with sales “roughly flat” when adjusting for foreign currency changes. Apple’s China sales had fallen 11 per cent year on year in the previous quarter.
Apple stopped offering written guidance figures during the coronavirus pandemic, but investors are keen to understand how trade tensions could impact Apple’s business over the coming months, and whether it could ultimately raise its prices.
In its initial response, Apple has moved to increase iPhone assembly in India to avoid the steepest tariffs.
While the administration has temporarily exempted smartphones from its 125 per cent “reciprocal” tariffs on China, Apple is still affected by an existing 20 per cent tariff on Chinese imports.
It could also still see further tariffs later this year pending the results of a national security investigation into semiconductors and electronics products that contain them.
Apple’s board approved a 4 per cent increase in its dividend and up to $100bn in share buybacks, broadly in line with the previous year.