From Morningstar: 2025-05-02 05:15:00

Apple’s March-quarter revenue increased by 5% year over year to $95.4 billion, with iPhone revenue up by 2% to $46.8 billion. Gross margin for the quarter rose to 47.1%. However, June-quarter guidance anticipates modest revenue growth and margin contraction due to a $900 million impact from US tariffs.

The impact of US tariffs on Apple is primarily on accessories, with core devices currently exempt. There is a risk of policy change, but most US iPhone units are imported from India, which has a lower tariff rate. Apple is taking precautionary measures by building up inventory of lower-cost products.

Morningstar maintains a fair value estimate of $200 for Apple, factoring in potential tariff costs and exemptions. There is a 25% downside risk to earnings if Apple loses its exemption and faces the full tariff rate. The firm may raise prices in the US and shift production to countries like India to mitigate risks.



Read more at Morningstar: Apple Earnings: Tariffs Loom Large, but We Continue…