Elon Musk’s company, Tesla (TSLA), has seen an increase in profit by 20% this Wednesday. Tesla has reported that their second quarter financials have shown better profits than expected, even after having below 20% margin on its vehicle discounts and price cuts. TSLA shares prices have dropped in late after closing slightly.
Tesla has reported that their second-quarter revenue has increased by 47%, which amounts to 24.93 billion dollars. This makes the profits increase by 20%, making per share increase in its price by 91 cents.
Elon Musk’s big bet that Tesla price cuts could boost sales and profits amid increasing competition and poor economic sentiment appears to be yielding mixed results. The company beat analyst expectations for net income in the April-June quarter and repo… https://t.co/fGUPsWdyiD
— KSTP (@KSTP) July 19, 2023
Analysts expected the profits to increase by 4%, which would have brought in revenue of 24.22 billion dollars, but the result fared better than their expectations. The revenue has increased by 43% compared to last year.
On the otherhand, the gross profits grew by 7%, which amounts to 4.53 billion dollars. Total gross margin has dipped from the previous quarter, which was 19.3%, and the second quarter gross margin was 18.2%, a dip of 682 basis points compared to last year.
CEO of Tesla, Elon Musk, told his company’s investors, “The short term variances in gross margins and profitability really are minor relative to the long term picture,” on Wednesday. In the second quarter earning call, he also added, “Autonomy will make all of these numbers look silly.”
Tesla stock fell by 4% late on Wednesday, with losses reported during the earning call. The regular market trade of TSLA fell by 0.7%, accounting for 291.26 million dollars.
$TSLA
Tesla’s Q2 income jumps 20%, although shares stayed flat amid concerns about profitsreported gross margin of 18.2% for the April-June period – the lowest in 16 quarters – compared with 19.3% for the first quarter. On an adjusted basis, Tesla earned 91 cents per share
The… pic.twitter.com/9Uc2kmuCh8
— Tesla Pablo 🔋 (@pablo9948967714) July 19, 2023
Danial Ives, an analyst at Wedbush who has been a long-time investor in Tesla, said the focus should be on auto gross margin “to gauge the impact of the price cuts and what this means for margins going forward.” He also expects the auto gross margin to be 17.5%.
And he also added that gross margins “should ramp back (up) over the coming quarters and back toward the 20% level heading into 2024.”
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