Tesla outperforms earnings estimates in the third quarter, with shares soaring in an after-hour trading despite revenue slightly missing projections.
Earnings per share stood at 72 cents for the third quarter, compared to the 58 cents forecasted by LSEG, while revenue reached $25.18 billion, falling short of the anticipated $25.37 billion.
Meanwhile, revenue surged by 8% from the previous year to $23.35 billion, leading to an increase in net income to approximately $2.17 billion or 62 cents per share, up from $1.85 billion or 53 cents per share, a year ago.
Tesla’s strong profit margins in the quarter were supported by a $739 million boost from automotive regulatory credits. The company is known for its surplus of credits as it exclusively produces electric vehicles, which other automakers can purchase if they do not meet the required quota for regulatory credits.
Automotive revenue saw a 2% increase to $20 billion from $19.63 billion the previous year, remaining relatively stable since late 2022. Energy generation and storage revenue witnessed a remarkable 52% surge to $2.38 billion, with services and other revenue, inclusive of non-warranty repairs for Tesla vehicles, jumping 29% to $2.79 billion.
Elon Musk, CEO of Tesla, expressed optimism during the earnings call, projecting a growth of 20% to 30% in “vehicle growth” for the upcoming year, attributing it to the introduction of “lower cost vehicles” and developments in autonomy. Analysts surveyed by FactSet had anticipated a total delivery increase of approximately 15% to 2.04 million next year.
Earlier this month, Tesla disclosed third-quarter vehicle deliveries totaling 462,890, with the company reporting that it had manufactured 469,796 electric vehicles by the end of September. While deliveries saw a 6% uptick from the previous year, they fell below analysts’ expectations following two consecutive quarters of year-over-year decline.
