Technology
Thursday, October 19th, 2023 1:49 pm EDT
Key Points
- Tesla’s Third-Quarter Results: Tesla’s third-quarter results disappointed Wall Street, as the company reported revenue of $23.35 billion and adjusted earnings of 66 cents per share, both of which fell short of expectations. This marked the first time Tesla missed on both earnings and revenue since Q2 2019.
- Elon Musk’s Pessimistic Commentary: During an investor call, Tesla CEO Elon Musk expressed concerns about the state of the global economy, citing the high-interest rate environment as a challenge for consumers looking to purchase cars. Musk emphasized the need to make Tesla’s products more affordable before pursuing a new factory in Mexico.
- Analyst Concerns and Cautious Outlook: Analysts from Bank of America and Morgan Stanley reiterated concerns and reduced estimates for Tesla’s fourth quarter and future years due to a “lower gross margin profile.” They were surprised by the amount of time Musk spent discussing the global economy. Musk’s cautious commentary led to concerns about vehicle demand, 2024 growth outlook, the Cybertruck’s slow and expensive ramp, and uncertainty surrounding the timeline of the next-gen platform, reinforcing concerns about Tesla’s challenging fundamentals in the coming year.
Tesla’s stock price declined over 6% following the release of third-quarter results that fell short of expectations. The electric automaker reported revenue of $23.35 billion and adjusted earnings of 66 cents per share, marking the first time Tesla missed on both earnings and revenue since Q2 2019. During an investor call, CEO Elon Musk expressed pessimism about the global economy, citing concerns about high interest rates making it difficult for consumers to purchase cars. Tesla aims to reduce vehicle costs before fully committing to building a new factory in Mexico. Analysts noted that the cautious economic commentary from Musk influenced the stock’s immediate reaction. Musk also tempered expectations for the Cybertruck, suggesting it will take a year or more for it to be a significant cash flow contributor. Deutsche Bank analysts raised concerns about Tesla’s challenging fundamentals heading into the next year, particularly regarding 2024 growth.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/10/19/tesla-shares-sink-6percent-following-earnings-commentary-by-elon-musk.html
