As Apple Inc. (AAPL, Financial) prepares to release its financial report, the focus is on CEO Tim Cook's response to the tariff policies implemented by former President Donald Trump. These tariffs have significantly impacted Apple, given that approximately 75% of its revenue comes from products like iPhones and Macs, primarily manufactured in China or other Asian regions. The U.S. remains Apple's largest market.
Morgan Stanley analyst Erik Woodring notes that Apple's strategy to mitigate supply chain and tariff risks will set the tone for the market. The potential for increased product prices or the company absorbing costs is of particular interest. The tariffs have already led to a 9% decline in Apple's stock price since their announcement.
Despite calls for Apple to shift iPhone production to the U.S., analysts argue that this is impractical and could raise iPhone prices significantly. President Trump has claimed ongoing communication with Cook, but Apple has yet to publicly disclose its stance on manufacturing shifts.
Current tariffs are projected to reduce Apple's annual earnings by about 6%, affecting its projected $94 billion profit for fiscal 2024. Analysts expect Apple's earnings per share to reach $1.62 with sales of $94.19 billion, reflecting a near 4% revenue growth year-over-year.
