Orange County Companies Face Mixed Impact from Trade Tariffs

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Local businesses in Orange County adjust to the impacts of trade tariffs.

News Summary

Orange County is witnessing varied responses from companies to recent trade tariffs. While Rivian Automotive scales back delivery forecasts, Masimo Corp. faces significant losses linked to tariffs and operational issues. Other firms like Skyworks Solutions report a decline in revenue but remain optimistic. Small business owners express concerns over rising costs, leading to alterations in operations. The future of imports might be at risk as tariffs potentially encourage innovation among smaller companies. This complex situation highlights how local businesses adapt to economic challenges.

Orange County is experiencing mixed reactions from publicly traded companies concerning the impact of recent trade tariffs instituted by the Trump administration. While some firms are reporting challenges related to increased costs, others are adapting their strategies to navigate through the current economic environment.

Rivian Automotive Inc., an electric vehicle manufacturer, has notably reduced its forecast for annual vehicle deliveries in 2025, estimating between 40,000 to 46,000 units—a decline from previous estimates of 46,000 to 51,000. Rivian, while fully manufacturing its vehicles in the U.S., is feeling the effects of the global trade situation. The company reported a modest revenue increase of 3% to $1.24 billion in the first quarter yet faced a substantial gross loss of $527 million from the same period last year. Following the announcement of its lowered expectations, Rivian’s stock dropped by 5.8%, resulting in a market capitalization of $14.6 billion.

Another affected entity, Masimo Corp., reported losses of $650 million significantly linked to investments in consumer devices. The company is divesting its consumer audio segment, Sound United, for $350 million. Its CEO cited adverse financial impacts due to tariffs, leading to the decision to open a new manufacturing facility in Malaysia. In addition to the tariff effects, Masimo faced operational hindrances, including a cyberattack that disrupted manufacturing and fulfillment, causing shares to decline by 7% to $150.11.

Skyworks Solutions Inc., known for semiconductor manufacturing, faced an 8.9% decline in revenue to $953 million. However, the company provided a positive outlook for its upcoming fiscal third quarter, projecting revenues between $920 million and $960 million. Skyworks is working to manage tariff-induced challenges as key customer Apple shifts production from China to locations like India and Vietnam.

Chipotle Mexican Grill Inc. recently hired Jason Kidd, the former COO of Taco Bell, which led to a stock rise of 2.5% to $51.64. The restaurant chain reported a first-quarter revenue growth of 6.4%, although it experienced a slight 0.4% decline in same-store sales, indicating some ongoing challenges in maintaining growth.

Meanwhile, Viant Technology Inc. reported a promising 32% revenue boost to $70.6 million, despite concerns over a potential slowdown in advertising spending from certain clients. Conversely, Ducommun Inc., a defense contractor, delivered better-than-expected earnings and revenues for the first quarter, asserting that tariffs would not significantly impact their business outlook.

Concerns are echoed by small business owners across Orange County. Delilah Snell, owner of Alta Baja, has paused her expansion plans, while Jeffrey Jensen, the owner of Chapter One, has seen costs for avocados and limes rise 20% since January. These increased costs are forcing some businesses to make difficult decisions, including layoffs, while others have begun securing inventory at pre-tariff prices to mitigate risks.

Problematic tariffs have been predicted to lead to a 20% decline in U.S. imports if they remain in force, according to the National Retail Federation. An office furniture manufacturer in Torrance recently canceled orders valued at $3.8 million, citing rising expenses as the primary reason. In contrast, Lily Jack, a furniture maker, noted that her firm is somewhat shielded from tariffs due to trade agreements, allowing for a more favorable operational position than some of its peers.

Business experts believe ongoing tariffs may prompt smaller companies to innovate and reassess their supply chain strategies in response to escalating costs and evolving market dynamics. Overall, while some Orange County companies grapple with the financial ramifications of new trade tariffs, others are finding ways to adapt and potentially thrive despite the challenges.