Tesla's 2Q profit falls 45% to $1.48 billion as sales drop despite price cuts and low-interest loans
Tesla's second-quarter net income fell 45% compared with a year ago as the company's global electric vehicle sales tumbled despite price cuts and low-interest financing. It was worse than expected. Its shares fell about 7.5% in after-hours trading.
The Austin, Texas, company said Tue that it made USD1.48 billion from Apr through Jun, less than the USD2.7 billion it made in the same period of 2023. It was Tesla's second-straight quarterly net income decline.
Second quarter revenue rose 2% to $25.5 billion, beating Wall Street estimates of $24.54 billion, according to FactSet. Excluding one time items, Tesla made 52 cents per share, below analyst expectations of 61 cents.
Earlier this month Tesla said it sold 443,956 vehicles from Apr through June, down 4.8% from 466,140 sold the same period a year ago. They still were a sign of weakening demand for the company's aging product lineup.
For the first half of the year, Tesla has sold about 831,000 vehicles worldwide, far short of the more than 1.8 million for the full year that CEO Elon Musk has predicted.
The company's widely watched gross profit margin, the percentage of revenue it gets to keep after expenses, fell once again to 18%. A year ago it was 18.2%, and it peaked at 29.1% in the first quarter of 2022.
Tesla said it posted record quarterly revenue "despite a difficult operating environment." The company's energy-storage business took in just over USD3 billion in revenue, double the amount in the same period last year.
In investigative documents, the U.S. National Highway Traffic Safety Administration said it found 75 crashes and one death involving "Full Self Driving." It's not clear whether the system was at fault.
Musk said the company will deliver its new more affordable vehicle in the first half of next year. Earlier, he said Tesla would deliver them at the end of this year.
The company, he said, wants to wait until after the U.S. presidential election before deciding whether to build a new factory in Mexico. Republican nominee Donald Trump has threatened to slap tariffs on autos made in Mexico, so it wouldn't make sense to build there in that case, Musk said. Musk has endorsed Trump.
Morningstar analyst Seth Goldstein attributed the large stock drop to Tesla giving little new specific information on vehicles or tangible financial targets. "Maybe some investors are saying 'you know, we didn't get more details from management,'" Goldstein said.
Although the next scheduled catalyst that could move the stock is now the robotaxi event in Oct, Goldstein said Musk could share details of new products on X, his social media platform. "Elon Musk could share details of Tesla's progress," he said. "That could be a catalyst for the stock on any given day."
During the quarter, Tesla's revenue from regulatory credits purchased by other automakers who can't meet government emissions targets hit USD890 million for the quarter, double Tesla's amount of most previous quarters.
The company reiterated caution that its sales growth in 2024 "may be notably lower than the growth rate achieved in 2023."
While its cash flow turned positive, its profitability remains under pressure. Tesla posted a 6.3% operating margin in the second quarter, down from 9.6% a year earlier and below that of many established automakers.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Moo Contributor
Follow me to get useful analysis, learn TA and make profitable trades.
Maximise profit 利润最大化
7474Followers
45Following
26KVisitors
Follow