Apple has provided Wall Street with some welcome relief, after it posted second quarter results slightly ahead of expectations, amid concerns over its exposure to Donald Trump’s tariffs.
In its second quarter financial results, Apple posted a rise in both profits and revenues, but the firm said most devices sold in the United States will no longer come from China, with most iPhones being sourced from India instead.
Meanwhile Vietnam will be a major production hub for items like iPads and Apple Watches, but devices sold outside of the US will continue to be made in China.
Tariff costs
The financial results show that Trump’s escalating trade war has so far had a limited impact on its fiscal performance.
But Apple’s reliance on Chinese factories to manufacture the bulk of its iPhones means the tech giant is potentially more exposed to the impact of Trump’s trade war than others.
During a call with investors on Thursday, Cook said that he expects the tariffs to add $900m (£677m) to its costs for the upcoming quarter that ends in June, the Guardian reported.
However that is assuming, he reportedly said, that the global tariff rates don’t change again.
Cook declined to speculate further into the future, reportedly saying, “I’m not sure what will happen with the tariffs … It’s very difficult to predict beyond June.”
Cook also reminded investors on the earnings call that Apple plans to invest $500bn (£375bn) across several US states over the next four years.
Q2 financials
So how well did Apple actually perform in its second quarter, amid Trump’s economic turmoil?
For its second quarter ending 29 March, Apple posted a net profit of $24.8bn (£18.7bn), up from a profit of $23.6bn (£17.8bn) in the same year-ago quarter.
Total revenues for the second quarter came in at $95.4bn ($71.8bn), up 5 percent from $90.8bn (£68.3bn) in its second quarter of 2024.
Analysts had predicted revenues of $94.5bn (£71.1bn) for the quarter.
“Today Apple is reporting strong quarterly results, including double-digit growth in Services,” said Tim Cook. “We were happy to welcome iPhone 16e to our lineup, and to introduce powerful new Macs and iPads that take advantage of the extraordinary capabilities of Apple silicon. And we were proud to announce that we’ve cut our carbon emissions by 60 percent over the past decade.”
Apple’s iPhone 16e. Image credit: Apple
Apple Q2 financials showed geographically that sales increased in the Americas at $40.3bn (£30.3bn); only slightly increased in Europe at $24.5bn (£18.4bn); and were down slightly in China at $16bn (£12bn).
The revenue increase in the America could be attributed as coming from US shoppers rushing to make purchases before the new tariffs came into force.
However the full impact of any panic buying in the US will only emerge when Apple reports its results from April to June later in the year.
Product breakdown
Digging into the product line breakdown, Apple’s iPhones are of course it principle cash cow.
During the second quarter Apple posted iPhone revenues of $46.8bn, up from $45.9bn a year ago; Mac sales were up at $7.9bn from $7.4bn in the same year-ago quarter; iPad sales up at $6.4bn from $5.6bn a year-ago; Wearables, Home and Accessories was down at $7.5bn from $7.9bn a year earlier, and Services was up at $26.6bn from $23.9bn a year ago.
Since the beginning of the year, Apple’s stock has slumped 16 percent. On Wednesday Apple’s stock price rose to $213.32.
Soon after Trump had announced his tariffs, Apple had chartered cargo flights to ferry 600 tons of iPhones, or as many as 1.5 million, to the United States from India, and has also stepped up production in that country.
