The value of Tesla Inc. has decreased. more than 6% in the long session on Wednesday after the electric car maker missed quarterly expectations for its earnings and saw adjusted profit margins fall to its cutting its EV prices.
it earned $2.5 billion, or 73 cents a share, in the first quarter, compared with $3.3 billion, or 95 cents a share, last year. Adjusted for one-time items, the company earned 85 cents per share.
Revenue rose 24% to $23.3 billion. Ebitda margins fell to 18.3%, from nearly 27% in the previous quarter, while operating margins fell to 11%.
“We think we want to continue to make as many cars as we can,” CEO Elon Musk said on a call with analysts after the results. “It’s a good time to expand our leadership.”
Analysts polled by FactSet expected Tesla to report adjusted earnings of 85 cents on sales of $23.6 billion. Adjusted profit margins were found to be around 20%.
Tesla’s margins “are some of the best in the business,” Musk said on the phone, adding that Tesla is going for higher volumes and a larger EV fleet. next, which in the future will be completely free, which are the right choices. the time.
After the call, Musk said he believes Tesla will be able to produce autonomous vehicles later this year. Musk has made similar, and apparently unproven, predictions on other occasions.
The CEO deflected some questions about demand, sales prices and other aspects of the business, saying at times that he lacked a “financial people” to look at the future.
In a letter to shareholders about the results, Tesla said it intends to “reduce the cost of our vehicles, while improving production at our new factories and with low interest rates, and continuing to use leverage like we do.”
The company opened a new round of US price cuts earlier on Wednesday in a bid to boost demand amid fears of a weak economy, but also vowed to cut its coins.
The price will continue to “go up or down, depending on many factors,” the company said in the letter.
The drop in Ebitda to 18.3% “doesn’t matter to me at this point,” because it was very close to expectations, Bill Selesky at Argus Research said after the results. “I didn’t see it as a big loss.”
“Earnings are very healthy” compared to others in the auto industry and considering the economy, said Jeff Windau, an analyst at Edward Jones.
Despite the profit, Tesla “will have a way to grow and grow based on past performance and the fact that the EV industry is ready,” said Alyssa Altman, an consultant at Publicis Sapient who looks at transportation and mobility issues.
“The company is well placed against most of the other competitors who are building their presence or redefining their business models to be focused on the EV customer and including developing software products,” Altman said.
Tesla said that it intends to “continue forward” of its long-term goal to increase its production rate by 50% per year, producing 1.8 million cars in 2023. Tesla “is shoot 2 million, but that’s the upside case,” Musk said on the phone.
The Cybertruck, Tesla’s electric pickup truck, is on track to begin production later this year at the Texas plant and Tesla continues to make “progress” on its upcoming EV platform measure, said the letter.
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The company ended the quarter with cash and cash equivalents and investments of $22.4 billion, $217 million more than the end of the fourth quarter.
The deal represents a “unique opportunity” for the company, Tesla said in the letter.
Tesla intends to “use our position as a cost leader. We are focused on the rapid growth of production, investments in autonomy and car programs, and it remains on the way with our growth.
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In January, Tesla reported operating margins of 16% for the fourth quarter and 16.8% for all of 2022. The first quarter of 2022 margin was “above 19%,” Tesla said in April. gone
Tesla recorded a drop in first-quarter production due in part to higher inventory, logistics and warranty costs, lower loan proceeds, and increased production costs. new cell phones.
Tesla’s stock has fallen about 46% in the past 12 months, compared with losses of about 7% for the S&P 500 index SPX,
This year, however, the stock is up 49%, compared to an 8% advance for the S&P 500.