Tesla stock jumped ahead of Q3 earnings
Tesla ( TSLA ) reported mixed third-quarter results after hours Wednesday, but the stock jumped in after-hours trading as investors took note of an earnings beat, higher gross margins and news that Tesla's cheaper EV is on track for production next year. CEO Elon Musk also added on the earnings call that Tesla's volume growth could be 20-30% next year.
For the quarter, Tesla reported $25.18 billion vs. the Bloomberg consensus of $25.4 billion, up from $25.05 billion and topping the $23.40 billion Tesla reported a year ago. Tesla posted adjusted EPS of $0.72 vs. $0.60 expected, on adjusted net income of $2.5 billion and free cash flow of $2.9 billion.
A closer look at the gross margin figure came in at 19.8%, much higher than the expected 16.8%.
Tesla shares rose nearly 11% in after-hours trade.
“We delivered strong results in the third quarter with sequential and year-over-year increases in vehicle deliveries, resulting in record third-quarter volumes,” the company said in its earnings call. “Preparations are underway for our new vehicle offering – including more affordable models – which we will launch in the first half of 2025.”
Earlier this month, Tesla announced third-quarter deliveries that slightly missed expectations, sending the stock lower.
Tesla said it delivered 462,890 vehicles in Q3, up 6.4% quarter over quarter, marking the first quarter of delivery growth this year. This figure is ahead of the company's delivery of 435,059 EVs in the year-ago period. But Wall Street had expected Tesla to deliver closer to 463,897, according to Bloomberg.
“The refreshed Model 3 ramp continued successfully in Q3 with higher total production and lower cost of goods sold quarter-over-quarter. Cybertruck production increased steadily and achieved a positive gross margin for the first time,” Tesla said in its report.
Tesla said it expects to achieve a “slight increase” in vehicle deliveries in 2024. CEO Elon Musk added during the conference call that growth of 20-30% is possible next year, though he considered that a “best guess.”
Ahead of Tesla's Q3 release, shares fell about 11% since Tesla unveiled its robottaxi, dubbed the CyberCab, on Oct. 10 from the Warner Bros. studio lot in Burbank, Calif.
The debut and unveiling of a cheaper EV has many analysts and industry watchers believing that EV sales will rise in the next phase, as CEO Elon Musk has said before. During their Q2 report, Tesla and Musk said the company is on track to produce new vehicles, including a cheaper EV, in the first half of next year.
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