By Mark Gurman
Apple Inc.’s much-awaited quarterly earnings report failed to soothe investor concerns about its biggest challenges, including escalating tariff costs and a slowdown in China.
The company’s shares declined as much as 4.2% in late trading Thursday after Apple released second-quarter results that included worse-than-expected sales in China. The iPhone maker also warned that tariffs will increase costs this quarter, a sign that geopolitical tensions are taking a growing toll on the world’s most valuable business.
Apple expects $900 million in higher costs from tariffs in the current period, Chief Executive Officer Tim Cook said during a conference call. Revenue will increase by a percentage in the low- to mid-single digits in the quarter, compared with a 5% average analyst estimate. The company didn’t offer any guidance on the impact of tariffs beyond the current period.
“We will manage the company the way we always have, with thoughtful and deliberate decisions, with a focus on investing for the long term,” Cook said during the call.
Sales from China, meanwhile, fell 2.3% to $16 billion in the second quarter, which ended March 29. Analysts had predicted $16.83 billion. That shortfall is an ominous sign for what was once a growth market.
Apple has lost ground to local phone brands, such as Huawei, Xiaomi and Oppo, and the government there banned foreign-made technology from some workplaces. Apple’s China-centric production also makes it especially vulnerable to tariffs announced by the Trump administration.
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