APPLE shares fell 5 per cent yesterday after the company trimmed its stock buyback program and CEO Tim Cook flagged a $900 million tariff-related hit to costs this quarter amid a raging Sino-US trade war.
US President Donald Trump’s tariff flip-flops have thrown corporate plans into disarray, even for Apple, which along with Microsoft, has been juggling the title of the world’s most valuable company.
The company has been stocking up to cushion the blow from potential supply-chain snarls and rising US import costs. But with consumer confidence sliding, some analysts said Apple may face weakening iPhone demand in its home market.
Its decision to lower its buyback authorization by $10 billion also marked a rare pullback that signalled a desire to preserve cash in the face of uncertainty. Typically, it has either maintained or increased its repurchase levels.
“The $100bn buyback announced is below the $110bn announced a year ago, which we found as a bit of a head-scratcher, as Apple historically either holds its buyback or increases it authorisation,” said Angelo Zino, equity analyst at CFRA Research.
Analysts have warned US tariffs on China could drive up iPhone prices, if Apple chose to pass on the added costs to consumers. But Cook said most of the devices sold in the US this quarter would be manufactured outside China.
A last-minute exemption for consumer electronics has also offered temporary relief, even as the White House continues to weigh further trade actions.
Cook said on Thursday Apple is ramping up efforts to shift its supply chain away from China, with most US-bound iPhones now set to be assembled in India.
Apple reported quarterly sales of $95.36bn and earnings of $1.65 per share, narrowly beating market expectations. The company forecast low-to-mid single-digit revenue growth, in line with muted expectations.
In China, Apple posted $16bn in revenue, slightly above forecasts, though competition from Huawei and slower AI rollout continue to pressure market share.
If losses hold, Apple is on track to shed more than $150bn in market value, while a bullish outlook from Microsoft earlier this week has helped the Windows-maker become the world’s most valuable company.
Cook said Apple’s shift away from manufacturing in China would include sourcing more chips from the US and expanding its footprint in key states like Texas, Arizona, and Oregon, but acknowledged the transition comes at a cost.
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