Apple Revenue Forecast Beats Estimates

Source Credit : Reuters

Apple forecast revenue for the current quarter ending in September well above Wall Street’s estimates on Thursday, sending shares up despite a warning from CEO Tim Cook that U.S. tariffs would add $1.1 billion in costs over the period.

As the centerpiece of U.S. President Donald Trump's trade war, those tariffs cost Apple $800 million in the June quarter and spurred some customers to buy iPhones in late spring this year. Those purchases helped Apple's fiscal third-quarter sales beat expectations by the biggest percentage in at least four years, according to LSEG.

The company still forecast growth, though, with Chief Financial Officer Kevan Parekh saying the company expects revenue growth for the current quarter in the "mid to high single digits," which would exceed the 3.27% growth to $98.04 billion that analysts expected, according to LSEG data.

Apple reported $94.04 billion in revenue for its fiscal third quarter ended on June 28, up nearly 10% from a year earlier and beating analyst expectations of $89.54 billion, according to LSEG data. Its earnings per share of $1.57 topped expectations for $1.43 per share.

Apple shares were up 3% in after-hours trading, extending gains after Apple provided its forecast.

Apple Stock Price

Sales of iPhones, the best-selling product for the company based in Cupertino, California, were up 13.5% to $44.58 billion, beating analyst expectations of $40.22 billion.

Apple has been shifting production of products bound for the U.S., sourcing iPhones from India and other products such as Macs and Apple Watches from Vietnam.

The ultimate tariff rates many Apple products could face remain in flux, and many of its products are currently exempt. Sales in its Americas segment, which includes the U.S. and could face tariff impacts, rose 9.3% to $41.2 billion.

In Greater China, where Apple has faced long delays in approval to introduce AI features on its devices, sales were $15.37 billion, up from a year ago and above expectations of $15.12 billion, according to a survey of five analysts from data firm Visible Alpha.

That gain was a turnaround from a year-over-year decline in China sales in the March quarter.

In a conference call with analysts, Cook said some of that was due to a subsidy program in China to help revive the smartphone market, which boosted some of Apple's products.

"It was the first full quarter of the subsidy playing out," Cook told analysts.