Tesla (TSLA) Financial Results: Analysis

Tesla Inc. (TSLA), the world’s largest automobile manufacturer by market value, beat analysts’ estimates for third-quarter profit amid rising materials costs, inefficiencies at some factories, and transportation logistics woes. Its shares fell as revenue came in short of expectations.

Tesla’s adjusted earnings per share (EPS), excluding certain items, climbed 69.4% year-over-year to $1.05, topping an expected $1.01. Revenue grew by 55.9% to $21.5 billion, shy of the $21.9 billion analysts had predicted.

Auto companies have struggled to adjust to increasing customer demand earlier in the year because of supply chain issues and shortages of key materials. At the same time, persistent inflation and a cooling economy in recent months could signal a decline in demand. Tesla said that it is focused on ramping up vehicle production and that battery materials constraints and more expensive and complex transportation capacity to deliver vehicles have been significant headwinds.

Tesla Chief Executive Officer Elon Musk has either sold or borrowed against billions of dollars of company stock to fund his highly publicized and controversial bid to buy Twitter Inc. (TWTR), further complicating the picture for investors.

TSLA Vehicle Production

Tesla said earlier this month that it produced 365,923 vehicles in the quarter and shipped 343,830 of them, underscoring the difficulties of a potential backlog. Nonetheless, Tesla’s number of vehicles produced topped analyst expectations of 363,300.

Outlook and Stock Performance

Tesla didnpt a detailed outlook for the fourth quarter. The company said that over the coming years, it expects to achieve average annual growth of 50% in deliveries. That depends on factory uptime, operational efficiency, the stability of the supply chain, and equipment capacity. The company also expects an acceleration iof software-related profits, although it didn’t provide a timeframe.

Shares of Tesla fell by 8.24% as of 5:18 p.m. New York time. They’re down 23% in the past year, compared with an 18% drop in the S&P 500 Index.

Tesla will report its next quarterly earnings on Jan. 25, 2023.