Elon Musk’s Tesla said on Wednesday it expects to achieve a slight increase in vehicle deliveries this year and reported a higher-than-expected profit margin for the third quarter, sending shares up 5% after hours.
“We delivered strong results in the third quarter with increased vehicle shipments both sequentially and year over year, resulting in record third quarter volumes,” Tesla said in a statement.
“We also recognized our second-highest quarter of regulatory loan revenue.”
Third-quarter profit rose 17% to $2.2 billion.
It also said cost of goods sold — or raw material costs — per vehicle fell to an all-time low of about $35,100.
Tesla said earlier this month that its deliveries in the September quarter rose more than 6% on a year-over-year basis, marking the first quarter of growth after a decline in the January-June period.
The company cut prices last year leading to a sharp drop in profit margins.
This spring, it shifted its strategy to offering cheaper financing options and discounts that analysts have said could slow its margin erosion in the coming quarters.
The prices of raw materials used to make EV batteries have fallen, and Tesla has said its costs will decrease this year as a result, with the effect diminishing over time.
Earlier this month, Tesla unveiled its robotaxi product, called the Cybercab, and a 20-seat self-driving van as it tries to accelerate development of its autonomous technologies, including the humanoid robot Optimus.
Revenue for the July-September quarter was $25.18 billion, compared with estimates of $25.37 billion, according to data compiled by LSEG.
It reported sales of $23.35 billion in the corresponding quarter of 2023.
Adjusted earnings were 72 cents per share in the third quarter, beating an average estimate of 58 cents.
The company’s profit margin of 19.8% in the July-September period was higher than estimates of 17.3%, according to 21 analysts polled by LSEG.
This compared to 18% in the second quarter.
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