Apple announced strong revenue growth on Thursday, preparing for challenges from President Donald Trump’s tariff dispute with China.
The company reported $95.4 billion in revenue for the quarter ending March 29, a 5% increase year-over-year, surpassing expectations of $94.6 billion. Net income reached $24.8 billion, up 5% from last year and slightly above forecasts of $24.5 billion.
These results predate Trump’s April 2 tariff announcement, which caused Apple’s stock to drop. With significant supply chains in Asia, Apple is vulnerable to the U.S.-China trade conflict. iPhone revenue grew 2% to $46.8 billion, while China sales dipped 2.4% to $16 billion due to competition from local brands.
The services segment, including the App Store and Apple Pay, surged 12% to $26.6 billion.
Apple’s stock declined 2% in after-hours trading. CFO Kevan Parekh told the Financial Times there was no notable spike in demand before the tariffs. He highlighted efforts to optimize the supply chain and noted stable China sales, adjusted for currency fluctuations, compared to an 11% drop in the prior quarter.
Apple has not provided formal guidance since the pandemic, but investors are focused on how trade tensions might affect future performance and pricing.
To counter tariffs, Apple is expanding iPhone production in India. While smartphones are currently exempt from new 125% tariffs, a 20% tariff on Chinese imports persists, and further tariffs may arise from a national security probe into electronics.
Apple’s board raised its dividend by 4% and authorized $100 billion in share repurchases, consistent with last year.
WHAT YOU SHOULD KNOW
Apple’s Q1 2025 results demonstrate financial strength, with solid revenue and profit growth driven by iPhones and services.
The company faces significant risks from U.S.-China trade tensions, which threaten its supply chain and market performance in China.
By diversifying production to India and optimizing its supply chain, Apple is taking proactive steps, but the scale of the challenge is immense.
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