Tesla Shares fly high after crushing third- Quater Earnings

Tesla Shares fly high after crushing third- Quater Earnings

Tesla has surprised lots of people by its strong third-quarter earnings report right after the bell on Wednesday 23rd Oct. It has posted a surprise profit and told its shareholders about the new factory in Shanghai. The shares have spiked more than 20% after a few hours; this raise is putting them at their highest price since February of 2019.

Before the results, the analyst’s expectations were quite different. Have a look at the present outcome versus the analyst’s expectations:

Tesla 3rd quarter

Analysts have expected that 42cents loss per share vs. Its current reality is it has adjusted earnings per share of $1.86, which is excellent.

Expected revenue is 6.3 billion according to the definitive estimate vs., In reality, it touched $6.3 billion.

Tesla, the famous electric car maker, has given investors plenty to look forward to the next financial year. 

Tesla has released a 28 Pages glossy investor update, which is filled with the new photos from its brand new factory in Shanghai. Here the Tesla has already begun the trial production runs as well.

Tesla company has also shared that it was well ahead of schedule on its most awaited Model Y crossover. You can expect this car to launch by next summer. Along with this car launch, Tesla is also planning to make a limited run on its Semi truck next year. They said they would soon announce the location of its Giga factory in Europe. It also aims to begin new factories to make electric vehicles from 2021 onwards. 

Q3 2019 update:

Tesla said that “Gigafactory Shanghai was just built in 10 months and it is ready for the production. Although it’s 65% less expensive than CAPEX per unit capacity, but it is capable enough to full-fill the needs of the production unit.

In the last quarter, Tesla shares have been dropped massively after the company has reported losses of $1.12 per share and $6.35 billion in revenue. Last year, at the same time, it had a historic third quarter with an income of $6.82 billion and the unique earnings of $2.90 per share. 

In Q3, Tesla has released the special over-the-air software updates, which includes controversial smart summon feature. This feature lets some tesla drivers use the app to call and control the cars. 

The Tesla cars can come to pick for a short distance without a driver. So, this feature has become a revolutionary feature among the people.

The margins of profit will be a focus on today’s third-quarter earnings call. As Tesla has launched new Autopilot software upgrades, this has enabled the company to recognize deferred revenues. The tesla company has been rigorously selling more, lower-priced models such as Model 3 vehicles in 2019, and very few of its higher-priced versions such as Model S and Model X’s are sold.

Company Reports says: “Despite Reduction in the average selling price (ASP) of its model 3, its gross margins have strengthened.”

Specifically, the Automotive gross margin for the tesla brand rose is 22.8% in the Q3. In Q2, auto gross margins are around 18.9%, but still, it has less gross margins of about 25.8 %. The company said that margins are improved compared to Q2. 

The CFO Zach Kirkhorn said that earnings in revenue related to the smart summon update is more than $30 million. Today’s earnings are the first report after the departure of former CTO JB Strauble. 

Key Points:

  • Tesla reported that its third-quarter revenue is around $6.3 billion, and its earnings per share are about $1.86 on 23rd Oct.
  • Present shares spiked almost 20% after Tesla posted its surprise profit, and it also said about its new factory in Shanghai as well.

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