Tesla revealed its third-quarter operating income dropped 40% compared to the year-ago period despite setting a new record for deliveries and revenue during the period. Officials cited a litany of reasons, but the biggest drivers appear to be tied to tariffs and sales mix.
Tesla set a new record for global deliveries during the third quarter, but saw its operating profit drop.
The company’s total revenue came in at $28.1 billion for the quarter, a 12% jump over the previous year’s $25.2 billion. However, its automotive revenue rose just 6% to $21.2 billion while its energy generation and storage revenues jumped 44%.
The big news for many is drop in income from operations of 40%, sliding from $2.7 billion to $1.6 billion. The company’s adjusted EBITDA fell as well, declining 9% from $4.7 billion to $4.2 billion. Officials pointed to a variety factors, including selling few regulatory credits to other automakers, a one-time charge on revenue from Full Self-Driving sales, as well as it simply costing more to produce vehicles.
Tesla faced tariff increases as well as a less profitable sales mix during the quarter, which all helped to drive down its profits.
Results mixed
Tesla has a new Standard, and it’s less expensive. The new Model 3 Standard is about $5,500 cheaper than the Premium variant.
The company’s numbers surpassed some of the expectations set by Wall Street analysts — but fell short in others. The revenue number beat expectations by a fair margin — $28.1 billion vs. $26.4 billion, according to LSEG data. The gross margin number of 18% also exceeded expectations of 17.5%
Tesla posted adjusted earnings per share (EPS) of $0.50 vs $0.54 estimated, translating to EBITDA of $4.23 billion vs $3.78 billion expected, Yahoo Finance reported. Investors were largely unbothered by the results initially. The numbers were released just after the market closed at 4 p.m. The stock finished the day down slightly, 0.82%, at $438.97.
In after-hours trading, the stock has continued to fall. Early in the extended session it dropped below $430 a share, but rebounded slightly into the $431 range.
More Tesla News
- Tesla Rolls Out 1st Robotaxis, Announced $4.20 Ride Fee
- Tesla Calls “Absolutely False” Reports Its Seeking to Replace Musk
- Tesla Board Wants to Give CEO Elon Musk a $1 Trillion Pay Package
Positives reported
Tesla’s Robotaxis have begun rolling out into other cities beyond Austin, such as San Francisco.
The company did set a new record for global deliveries. Part of that can be attributable to changes in the U.S. market, mostly the end of the $7,500 federal tax credit. EV buyers rushed the showrooms of automakers looking to take advantage of the tax credit before it ended Sept. 30.
As a result, EV sales hit a new high during the month. Tesla’s global inventory amounted to fewer than 10 days’ worth of vehicle sales in the third quarter, the lowest level in about a year, according to the company.
Tesla also began operating its ride-hailing service in San Francisco using a small fleet of Robotaxis. The service had already been launched in Austin, where the company produces vehicles.
0 Comments