Customs refunds boost Apple's margins

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Two percentage points of gross margin and eleven cents per share: That's how much US customs refunds boosted Apple's June quarter results. The company had paid over three billion dollars in duties that a court later ruled unlawful. Some of that money has been returned, some not yet.

Apple disclosed two one-off effects in its third-quarter earnings report. The gross margin of 50.1 percent includes a positive contribution of approximately two percentage points from customs refunds, while the diluted earnings per share of $2.02 include a contribution of $0.11 from the same source. Without these refunds, the margin would be around 48 percent, which is within the company's own forecast – as can be calculated using the June quarter figures with $109.4 billion in revenue. The record still stands even without these effects, but it is less spectacular.

The legal background

The basis for the refunds is a decision by the US Supreme Court on February 20, 2026. By a vote of six to three, the court ruled that the International Emergency Economic Powers Act does not give the president the authority to unilaterally impose tariffs – the power to levy duties rests with Congress. The tariffs imposed on this legal basis were subsequently terminated by executive order.

For importers, the ruling opened the way to reclaim duties already paid. The US Customs Administration established a separate procedure for this purpose, which began in stages on April 20, 2026, and through which companies must register their claims. Apple had already stated in its second-quarter earnings call at the end of April that it would pursue this course of action.

Around two billion have returned

Apple doesn't specify an absolute figure, but it can be narrowed down based on the two reported effects. A two percentage point margin on $109.4 billion in revenue equates to approximately $2.19 billion. Using earnings per share as an approach leads to a slightly lower value: $0.11 on roughly 14.71 billion diluted shares yields just under $1.62 billion after taxes, or approximately $1.97 billion before taxes at the reported tax rate of 17.9 percent.

The range of approximately two to 2.2 billion dollars arises from the fact that Apple only provides rounded figures for the impact on margins. Based on the more than 3.2 billion dollars the company paid in total in the affected taxes, roughly one billion dollars remains outstanding.

The money should stay in the USA

Tim Cook reaffirmed in the conference call that Apple would reinvest the refunds in the United States. He had already made the same commitment at the end of April, when the refund process was still in its early stages. The announcement has a political dimension: President Trump had stated that he would be monitoring which companies were requesting refunds.

One detail is easily overlooked in the headlines. Apple did not pass the customs duties on to its customers at the time, but absorbed them itself. The refund therefore goes entirely into Apple's coffers and is not passed on to buyers in the form of price reductions. In the US, a law firm is currently investigating whether corporations have wrongfully maintained customs-related price increases after issuing refunds – based on the facts so far, this accusation does not apply to Apple.

Why buyers in Germany don't benefit from this

For the German-speaking market, this distinction is important because the two developments occurred close together in time and are easily confused. The tariffs were a US matter: they were levied on goods imported into the United States and never affected German, Austrian, or Swiss prices.

The price increases for Macs, iPads, and the Vision Pro in June have a different cause. They stem from the sharp rise in the costs of flash memory and RAM, triggered by the AI boom across the entire industry. Tim Cook had already announced this move in June, explicitly mentioning component costs.

This leads to an uncomfortable consequence: The refund improves Apple's balance sheet, but not the price tags in Europe. The price increase for the MacBook Neo from €699 to €799 remains, regardless of how much money flows back from Washington – a point that now carries more weight in the comparison between the MacBook Air and MacBook Neo than it did in the spring.

The remainder of the repayment depends on the court

Whether the remaining billion will be fully recovered is uncertain. The government has appealed a court order for uniform implementation, and a deadline applies to some imports, after which the settlement will be considered complete. For Apple, this is a manageable amount compared to quarterly revenue of $109 billion – but it has a greater impact on the balance sheet's significance, because a one-off effect of this magnitude skews the overall picture for two consecutive quarters. (Image: Shutterstock / zimmytws)

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Tags: TechPatient