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Tesla’s revenue fell short of Wall Street’s reduced expectations in the latest quarter and its core profit margins sagged, as planned factory shutdowns and price cuts dented the US electric-car maker’s performance.
However, Tesla shares rose in after-market trading as investors looked past what many saw as a trough in its profit margins, which reflected the impact of the price cuts the company made to stoke demand earlier in the year.
Tesla reported net income in the third quarter of $1.85bn, down 44 per cent from a year before, while earning per share on the pro forma basis Wall Street judges the company fell 37 per cent to 66 cents. Revenue grew 9 per cent to $23.35bn. Wall Street had been expecting pro forma earnings per share of 73 cents on revenue of $24.1bn.
The company had already revealed it delivered fewer new vehicles in the quarter than most analysts had expected, even after Wall Street forecasts had been lowered to reflect the impact of the factory downtime.
The production halts were to prepare for a revamped Model 3 and the long-awaited launch of an electric pick-up known as the Cybertruck. Deliveries reached 435,059, up 27 per cent from the year before but some 20,000 below most analysts’ predictions.
Excluding the impact of regulatory credits, the gross margin from Tesla’s automotive operations — a closely watched measure of its core operations — dropped to 16.3 per cent in the third quarter, below the 17 per cent most analysts had expected. That compared with 18.1 per cent in the second quarter and 26.8 per cent a year ago.
Tesla shares have risen 9 per cent over the past 12 months as Wall Street has bet that its industry-leading profit margins would give it room to cut prices this year to bolster its market share, even as rivals face growing losses from their EV programmes.
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