News Summary
Orange County businesses are struggling with President Trump’s tariffs, leading to significant operational challenges. Rivian Automotive adjusted its delivery forecasts, Masimo reported a $650 million loss, and Skyworks Solutions faced a revenue decline. Local entrepreneurs also expressed concerns over rising costs due to these tariffs. Economic implications for Southern California are concerning, with business leaders worried about long-term effects on trade.
Orange County Companies Face Balancing Act Amid Tariff Challenges
Orange County businesses are grappling with the adverse effects of President Trump’s tariffs, as several publicly traded companies reported significant challenges and adjustments in their operations. Rivian Automotive Inc. has revised its delivery forecast while Masimo Corp. announced a substantial loss tied to a prior investment.
Rivian Adjusts Delivery Forecast
Rivian Automotive Inc. recently announced a reduction in its annual delivery forecast due to trade issues that have negatively impacted consumer sentiment. The company reported a revenue of $1.24 billion and a gross profit of $206 million for the first quarter, but lowered its 2025 delivery target from an initial estimate of 46,000-51,000 units to a new range of 40,000-46,000 units. Following this announcement on May 6, Rivian’s shares fell by 5.8% to $12.72, despite being up 7% year-to-date.
Masimo Reports Loss and Sells Consumer Business
Masimo Corp. disclosed a substantial loss of $650 million related to its acquisition of Sound United, prompting the decision to sell the consumer audio business to Harman International for $350 million. The company’s CEO has indicated that tariffs have significantly contributed to its financial challenges. Additionally, to counter high costs in the U.S., Masimo has opened a facility in Malaysia. Following the announcement of these developments and the aftermath of a cyberattack on its operations, Masimo’s shares dropped 7% to $150.11.
Skyworks Solutions Sees Revenue Decline
Skyworks Solutions reported an 8.9% decline in revenue for the second fiscal quarter, totaling $953 million. The company faces ongoing difficulties attributed to tariffs as well as expected decreasing business from Apple Inc. Despite these challenges, Skyworks anticipates its third-quarter revenue to fall between $920 million and $960 million, exceeding analyst expectations.
Business Landscape in Orange County
In addition to these larger corporations, small business owners in Orange County, such as Delilah Snell and Jeffrey Jensen, expressed concerns over increased costs due to newly imposed tariffs, particularly affecting products like avocados and limes. The rising expenses are expected to create further obstacles for local entrepreneurs.
Economic Impact of Tariffs in Southern California
A report from the Los Angeles County Economic Development Corporation highlights potential economic ramifications in Southern California as tariff escalations continue. This region’s trade and logistics sector contributes nearly $300 billion in economic output and supports almost 2 million jobs. Business leaders are particularly worried about long-term effects that tariffs could have on trade with China, given the area’s heavy reliance on imports from the region.
Other Company Updates
Chipotle Mexican Grill appointed Jason Kidd, the former COO of Taco Bell, to the same position effective May 19. Following the announcement, the company’s shares rose by 2.5% to $51.64. Meanwhile, Viant Technology reported a 32% increase in first-quarter revenue, reaching $70.6 million. However, the company has indicated a prediction of slower revenue growth in the second quarter due to potential cuts in advertiser spending. Ducommun Inc. posted adjusted earnings of 83 cents per share for the first quarter and noted that tariffs would not significantly impact its financial outlook, thanks to its strong U.S. manufacturing base.
Conclusion
As companies in Orange County navigate the challenges posed by tariffs, their responses range from program adjustments to strategic divestitures. The overarching concern remains the potential long-term economic impact of these trade barriers on local businesses and the broader Southern California economy.
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Additional Resources
- Orange County Business Journal
- NBC Los Angeles
- Orange County Register
- ABC7
- Los Angeles Times
- Wikipedia: Tariffs
- Google Search: impact of tariffs on business
- Google Scholar: tariffs economic impact
- Encyclopedia Britannica: tariff
- Google News: Orange County businesses tariffs
