CEO Tim Cook said it would be very difficult to predict beyond the June quarter, adding that he was not sure what would happen with the tariffs.

Apple, Inc. (AAPL) shares fell on Thursday after the company warned that President Donald Trump’s tariffs could raise its costs by $900 million, tarnishing a quarterly earnings beat.

Cupertino, California-based Apple reported earnings per share (EPS) of $1.65 for the second quarter of the fiscal year 2025, marking 8% year-over-year (YoY) growth. The bottom-line result exceeded the Finchat-compiled consensus estimate of $1.61.

Revenue rose 5% YoY to $95.4 billion compared to the $94.75-billion consensus estimate, aligning with the guidance for mid-single-digit growth. 

CEO Tim Cook said, “Apple is reporting strong quarterly results, including double-digit growth in Services.”

CFO Kevan Parekh noted that the company’s EPS growth and $24 billion in operating cash flow allowed it to return $29 billion to shareholders during the quarter. 

He added that the base of active devices installed climbed to a new high across all product categories and geographies. 

Gross margin expanded to 47.05% from 46.58% a year ago, with product gross margin at 35.9% and Services margin at 75.7%.

Apple ended the quarter with a cash position of $133 billion.

How Apple’s Products Fared

The tech giant reported YoY revenue growth for all but one of its product categories.

  • iPhone: $46.84B (+1.9%) vs $45.62B consensus
  • Mac: $7.95B (+6.7%) vs $7.78B consensus
  • iPad: $6.40B (+15.2%) vs $6.23B consensus
  • Wearables, Home & Accessories: $7.52B (-4.9%) vs $7.98B consensus
  • Services: $26.65 (+11.7%) vs $26.71B consensus 

 

On the earnings call, Parekh said the iPhone active installed base reached a new record high and also clocked records in all geographies, according to a Koyfin transcript. Upgrade rates grew by double digits. 

Apple revenue from all geographies increased year over year except in Greater China, a region comprising mainland China, Taiwan, Hong Kong, and Macau.

Revenue from that region was down slightly over 2%, while the Americas, accounting for 42% of the total revenue, reported 1.9% YoY growth. Revenue from Japan climbed by the most (16.5%), followed by the rest of the Asia-Pacific region (8.4%).

Shareholder Return

Apple said its board approved a 4% dividend hike in its quarterly dividend to $0.26, with the dividend payable on May 15 to shareholders of record as of the close of business on May 12. 

The board also approved additional repurchase authorization for up to $100 billion of its stock.

Outlook

During the earnings call, Cook said Trump's tariffs would add $900 million to its June quarter costs, assuming the current global tariff rates, policies, and applications do not change for the rest of the quarter.

Parekh said June-quarter revenue will likely grow by low to mid-single digits compared to the year-ago quarter.

On average, analysts estimate EPS of $1.47 and 4.1% YoY revenue growth to $89.03 billion.

The company expects gross margins of 45.5%-47.5%, including the $900-million tariff impact, and operating expenses of $15.3 billion and $15.5 billion.

Cook said, “It’s very difficult to predict beyond June [quarter],” adding that he was not sure what will happen with the tariffs.

Retail Sentiment

On Stocktwits, retail sentiment toward the Apple stock stayed ‘bullish’ (55/100), and the message volume was normal.

AAPL sentiment and message volume as of 10:17 p.m. ET, May 1 | source: Stocktwits

A bullish watcher said Apple sellers will regret their decision as they expect a resolution to the tariff crisis.

Another user based their optimism on the earnings beat and the stock buyback the company announced.

Apple stock ended Thursday's session up 0.39% at $213.32 and plunged 3.78% to $205.25 after-hours.

The stock is down over 15% this year and trades well off its Dec. 26 all-time high of $260.10.

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