Europe's highest court concluded a decade-long legal battle by ruling that Apple Inc (NASDAQ:AAPL) must pay €13 billion ($14.4 billion) in back taxes to Ireland.
The charge, estimated to be around $10 billion, is expected to substantially increase Apple's effective tax rate for the quarter.
According to the company's 8-K filing, this could result in approximately a 10% impact on its earnings per share for the fiscal year 2024.
"Apple generated ~$100Bn free cash flow in FY2023 and we view the news as not material to our thesis," Citi analyst Atif Malik said in a note.
The company had already placed €12.7 billion, including interest, into an escrow account by September 2023. These funds were set aside and restricted from general use until a final decision was reached on the tax case.
"This has been a long, drawn out case and the final impact while not ideal, does not impact our fundamental valuation of Apple," Amit Daryanani, added.
Apple shares fell 0.5% during New York's Tuesday session.