Apple Expects $1.1 Billion Hit From Tariffs This Quarter, CEO Tim Cook Says

Key Takeaways

• Apple expects tariffs to cost the company $1.1 billion this quarter, CEO Tim Cook told investors on Thursday's earnings call.
• The iPhone maker said it absorbed $800 million in tariff costs in the fiscal third quarter.
• Morgan Stanley analysts have said President Trump could soon subject Apple to Section 232 tariffs, which are tied to national security issues.

Apple (AAPL) is preparing to absorb $1.1 billion in tariff costs this quarter, CEO Tim Cook said Thursday.

That's after the iPhone maker took a tariff-related hit to the tune of $800 million during the fiscal third quarter which ran through June, Cook told investors on the company's earnings call.

The $1.1 billion estimate assumes no changes in current tariff levels, which Cook said isn't something the company can be certain of. Last week, Morgan Stanley analysts said the Trump administration could soon subject Apple to Section 232 tariffs, which are tied to national security issues.

In response to tariffs, Apple has shifted some production from China to India. A majority of iPhones sold in the U.S. now come from India, Cook said, while the majority of Macs and other Apple products sold stateside are shipped from Vietnam.

Apple reported third-quarter earnings that topped estimates as its services revenue hit a record high. Its iPhone sales of $44.58 billion were up 13% year-over-year, and above the analyst consensus from Visible Alpha.

Do you have a news tip for Investopedia reporters? Please email us at tips@investopedia.com