Tesla Earning Report Q3

Even as supply chain issues impacted heavily on the auto sector, Tesla (TSLA) reported third-quarter profitability that exceeded forecasts, with record deliveries helping to propel the electric-vehicle maker’s performance. Quarterly revenue fell short of estimates, and shares dipped modestly in after-hours trade. The report’s metrics were compared to consensus estimates as follows:

  •  Revenue

$13.76 billion vs. $13.91 billion predicted, an increase of $8.77 billion years over year

  •    Earnings per share (EPS)

$1.86 compared. $1.67 predicted, a difference of 76 cents Y/Y

Earlier this month, the business stated that in the three months ending in September, it delivered 241,300 electric vehicles around the world, setting a new quarterly delivery record. That pushed the total number of deliveries to almost 627,500, significantly ahead of the nearly 500,000 expected for the entire year.

As a measure of electric vehicle demand, Tesla’s deliveries are one of the most closely monitored metrics. It also confirmed its prior forecast of 50 percent average annual growth in vehicle deliveries over a multi-year timeframe on Wednesday.

The more cheap Model 3 and Model Y vehicles, integrated under its reporting structure, drove third-quarter deliveries once again. These models accounted for over 232,000 of the total quarterly deliveries. The company announced on Wednesday that its average selling price (ASP) had dropped 6% year over year “due to continuous mix shift towards lower-priced models.”

Nonetheless, in the third quarter, it increased its operating margin to 14.6 percent, up from 11.0 percent in the second quarter and 9.2 percent in the same period last year. “As we continue to reduce costs at a faster rate than ASP drops, our operating margin reached an all-time high,” Tesla wrote in a shareholder letter.

Automotive gross margins, derived from the company’s main business of selling electric vehicles, increased to 28.8% in the third quarter from 25.8% in the second. This metric excludes the beneficial effects of the electric car maker’s regulation credit sales to other automakers. In the third quarter, high-margin regulatory credit sales totaled $279 million, down from $397 million in the same period last year.

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