Apple Earnings: Better iPhone Sales And Profit Than Expected As It Steps Through Tariff ‘M
May 1, 2025
Topline
Apple took center stage Thursday when it reported earnings from the first three months of the year, providing an early glimpse into the negative impact of the U.S.-China trade war on its border-spanning business.
Key Facts
In an earnings call, Apple CEO Tim Cook said the company expects President Donald Trump’s tariffs will cause a $900 million hit to the company’s bottom line during the second calendar quarter.
In a report for 2025’s first calendar quarter preceding the call, Apple generated $95.4 billion in revenue, compared to consensus analyst estimates of $94.4 billion, and $1.65 earnings per share ($24.8 billion net income), compared to forecasts of $1.62 EPS ($24.3 billion net income), according to FactSet.
Apple’s sales grew by 5% and its profit jumped by 8% compared to 2024’s first quarter, while iPhone sales rose to $46.8 billion, better than forecasts of $46 billion,
But sales in Apple’s Greater China region slipped to $16 billion, well below projections of $17 billion, and revenue in its high-margin services division including the App Store and Apple Music came in at $26.6 billion, just below estimates of $26.7 billion.
Shares of Apple were down about 4% to $205 in after hours trading.
The company announced it upped its quarterly cash dividend to $0.26 per share and its board approved a $100 billion share buyback program.
Key Background
To those analysts’ points, the quarter discussed in Thursday’s earnings report didn’t include the company’s topsy turvy April, including Trump’s far more aggressive than anticipated “Liberation Day” country-by-country duties and his standing down on his most aggressive levies. Notably for Apple, the White House lowered tariffs on Chinese smartphone imports from 145% to 20%, lowering Apple’s projected tariff profit hit from 29% to 5%, according to UBS. “I speak to Tim Cook. I helped Tim Cook, recently, and that whole business,” Trump said following the exemption about his relationship with Apple CEO Tim Cook. Apple assembles about 90% of iPhones in China, and generated about 17% of its revenue last fiscal year from its Greater China reporting segment.
Crucial Quote
Apple’s earnings report “will be an exercise in navigating policy minefields,” predicted Rosenblatt analyst Barton Crockett.
Apple Gets Blow From Epic Games Ruling
In the latest development of Apple’s legal standoff against Fortnite maker Epic Games, a federal judge ruled Wednesday that Apple knowingly violated a court order prohibiting the Silicon Valley titan from collecting fees on purchases made outside of iOS apps. Judge Yvonne Gonzalez Rogers said the company made “obvious lies” in court, holding the company in contempt.
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