Apple Cuts Buyback by USD 10 Billion as Trade War Costs Mount
- tech360.tv
- May 2
- 2 min read
Apple has reduced its stock buyback programme by USD 10 billion as it braces for nearly USD 900 million in added costs this quarter due to ongoing trade tensions.
Chief Executive Officer Tim Cook said Thursday that tariffs are forcing the company to shift its supply chain, with most iPhones sold in the U.S. this quarter now coming from India, and most iPads, Macs and Apple Watches from Vietnam.
Apple shares fell 4.3% following the announcement of its fiscal second-quarter results.
The company reported sales of USD 95.36 billion and earnings of USD 1.65 per share for the quarter ended March 29, slightly above analyst expectations. iPhone sales reached USD 46.84 billion, also beating forecasts.
However, Apple warned of a hit to gross margins in the current quarter, projecting 45.5% to 46.5%, below analyst estimates of 46.58%.
Cook said the company is stockpiling products to ensure most U.S. sales this quarter are not sourced from China. He added that Apple’s global supply chain remains complex and carries inherent risks.
Apple is also expanding its U.S. operations, with a planned USD 500 billion investment involving both capital and operational spending. The company currently sources 19 billion chips from 12 U.S. states and plans to grow its facilities in states including Texas, California, Arizona, and North Carolina.
Despite the trade challenges, Apple’s services business posted USD 26.65 billion in revenue, close to expectations. Sales in Greater China reached USD 16 billion, slightly above forecasts.
Revenue from accessories and wearables, including AirPods, was USD 7.52 billion, below estimates. iPad and Mac sales were USD 6.40 billion and USD 7.95 billion, respectively, with entry-level iPads performing best.
Apple also announced a 4% increase in its cash dividend to 26 cents per share. Its board authorised an additional USD 100 billion for share repurchases, down from USD 10 billion a year ago.
Apple expects USD 900 million in added costs this quarter due to tariffs
Most U.S. iPhones now sourced from India, other products from Vietnam
Buyback programme trimmed by USD 10 billion, now at USD 100 billion
Source: REUTERS
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