Tesla (NASDAQ:TSLA) Inc.'s ten-quarter streak of surpassing earnings expectations came to a halt on Thursday, as the company reported lower-than-expected earnings for Q3 2023. The electric vehicle (EV) manufacturer's earnings per share (EPS) stood at 66 cents, a substantial decrease from last year's $1.05 and below the Zacks Consensus Estimate of 72 cents.
Despite witnessing a 9% year-over-year (YoY) revenue growth to $23,350 million, Tesla failed to meet the consensus estimate of $24,381 million. This disappointing performance led to over a 4% drop in the company's shares during after-hours trading and resulted in reduced gross and operating margins.
In spite of utilizing incentives such as a full $7,500 federal tax credit under the Inflation Reduction Act for all trims of Model 3/Y vehicles in the U.S., Tesla's share of the domestic EV market dipped from 60% in Q1 to 50% in Q3. Tesla, however, remains optimistic about its delivery growth target of approximately 50%, projecting deliveries to reach 1.8 million units in 2023.
The company produced a total of 430,488 units in Q3 (416,800 Model 3/Y, and 13,688 Model S/X), marking an increase of 18% YoY. It managed to deliver a total of 435,059 vehicles during this period, indicating a YoY rise of 27%. Notably, Model 3/Y deliveries stood at 419,074 vehicles, reflecting a growth of 29% YoY. Conversely, Model S/X deliveries totaled only 13,688 units, down by 31% YoY.
Total automotive revenues reached $19,625 million for Tesla in Q3, up by 5% YoY. This figure included $554 million from the sale of regulatory credits for electric vehicles, which saw a YoY increase of 93.7%. Services and Other revenues were up by 31.6% YoY to $2,166 million, driven by supercharging, insurance, and body shop & part sales.
As of Sep 30, 2023, Tesla's financials displayed cash and cash equivalents of $26,077 million. The company generated a free cash flow (FCF) of $848 million during the quarter. Energy Generation and Storage revenues were at $1,599 million in Q3 2023, higher than last year’s $1,117 million due to the ramp-up of the Megapack factory in California. However, solar deployments declined amid high interest rates and the end of net metering in California.
Long-term debt and finance leases, net of the current portion, summed up to $2,426 million. Net cash provided by operating activities amounted to $3,308 million in Q3 2023. Capital expenditure totaled $2,460 million in the quarter under review. The automotive gross profit was reported at $3,668 million while energy storage deployments increased by 90% YoY to 4 GWh.
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