Tesla falls 3% after earnings, Q2 seen as a 'low quality' beat
Investing.com -- Tesla reported second-quarter results that beat on both the top and bottom line as the electric vehicle maker's margins were less bad than feared despite recent price cuts.
Still, Tesla Inc (NASDAQ: TSLA) shares were down nearly 3% in pre-market Thursday following the report.
Tesla reported EPS of $0.91 on revenue of $24.93 billion. Analysts polled by Investing.com anticipated EPS of $0.79 cents on revenue of $24.29B.
Gross margins excluding credits, which have been closely watched following recent price cuts, fell 6.82% to 18.2% in Q2 year over year, though that was higher than analysts' estimates for 16.9%.
"We believe Tesla is seeing steady demand post price cuts in the US and China with margins now in stabilization mode that should bottom over the next 1-2 quarters," Wedbush said in a note Wednesday following the results.
The Tesla price cuts helped the EV maker boost its installed base and rake in new EV customers, with deliveries surging 86% to 466,140 EVs in Q2, marking a record quarter for the company.
The company reiterated a multi-year forecast for 50% growth in deliveries. Tesla also indicated that 2023 deliveries of ~1.8M cars would be ahead of its long-term forecast.
Tesla said it remains on track for initial deliveries of its Cybertruck this year. Earlier this week, the EV maker said it had started production of its Cybertruck in Texas.
The EV maker is expected to ship around 2,000 units this year, Deutsche Bank estimated.
Gains in Tesla, which is up 169% year to date, have also been driven by optimism around demand for the company's supercharger network.
Several automakers including Ford Motor Company (NYSE: F), General Motors Company (NYSE: GM) and Mercedes Benz Group (OTC: MBGAF)have recently struck deals to access Tesla’s North American Charging Standard.
"[W]e believe the supercharger network represents a large monetization opportunity for the company in its growth story," Wedbush added.
BofA analyst John Murphy said the results were impacted by pricing actions.
"We reiterate our Neutral rating on Tesla, balancing near-term risks from the broader macro, increasing competition, and the impact of recent price adjustments on earnings against opportunities for growth, efforts to reduce costs, and its ability to remain agile," Murphy said.
Wells Fargo analyst Colin Langan added that Tesla delivered "a low-quality EPS beat".
"The EPS beat looks low quality, driven mostly by other income (+$328M vs. -$48M in Q1). Adj operating margins slightly missed, though excluding lower-than-expected EV credits, adj op margins were about in line. We expect the stock to still trade up slightly on results as buy-side expectations were low heading into Q2," Langan wrote.
Additional reporting by Senad Karaahmetovic