Raindrops are seen next to the Tesla logo
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Stock in electric vehicle pioneer Tesla was falling after the company reported impressive results that largely beat Wall Street projections—and just met rising investor expectations.
Shares were off 0.9% after-hours trading after closing up about 0.1% in regular trading Wednesday. The S&P 500 and Dow Jones Industrial Average both rose about 0.4%.
Tesla reported $1.86 in per-share earnings from about $13.8 billion in sales, beating Wall Street’s estimate for about $1.67 a share but missing its forecast for $13.9 billion in sales. Earnings are a record, and better than expected, but analyst estimates have been rising—by about 20 cents a share—in recent weeks after Tesla reported stronger than expected third-quarter unit deliveries on October 2.
The company delivered about 241,000 vehicles, roughly 10,000 to 15,000 more than analysts projected. What’s more, Tesla managed to ship about 40,000 more vehicles than it did in the second quarter of 2020 despite the semiconductor shortage that has constrained global auto production.
Tesla’s strong deliveries had already boosted the stock. Its shares had gained about 12% between reporting delivery results and Wednesday. The Nasdaq Composite Index is up about 4% over the same span. What’s more, Tesla stock is up 31% over the past three months.
The semiconductor and supply chain woes have led to higher costs for all auto makers. Gross profit margins, however, came in at almost 27% compared with about 24% in the second quarter of 2021. Automotive gross profit margins hit 30.5% despite receiving less cash from regulatory credits. Higher volumes out of existing plants is a big reason for improving profit margins.
Gross profit margins beat Wall Street projections. Operating profit also hit a new record. Reported quarterly operating profit topped $2 billion for the first time, up from $1.3 billion reported in the second quarter.
Overall, the result looks good enough to keep shares just about flat. Bulls might have hoped for a new high, eclipsing $900.40 set back in January, but might have to wait a little longer to see a $9 in front of the stock price.
Management hosts a conference call beginning at 5:30 Eastern time to discuss results. Investors and analysts will have questions about the new autonomous driving software the company just rolled out as well as the outlook for production from Tesla’s two new facilities in Texas and Germany.
Write to Al Root at [email protected]
