Tesla Sees Record Q3 Figures, Investors Not Impressed

The EV maker saw a sharp rebound from the second quarter, but revenue fell below expectations.
Oct. 19, 2022 22:17
Tesla Sees Record Q3 Figures, Investors Not Impressed

(CapitalWatch, Oct. 19, New York) The investor favorite Tesla (Nasdaq: TSLA) released better-than-expected earnings for the third quarter, but analysts' doubts sent company shares down 3% Wednesday evening.

The Elon Musk-led EV maker earlier reported record deliveries in the third quarter, up 42% year-over-year to 343,830 vehicles, signaling a rebound from the challenges in production in the preceding quarter.

On Wednesday after the markets closed, Tesla also posted $3.3 billion in profit and $21.5 billion in revenue. Operating margin was 17.2%, and cash flow remained strong, at $8.9 billion, according to the report.

Yet while Tesla's profit was near-record and its revenue the highest it has seen in a quarter, Wall Street wasn't impressed, as the latter was still somewhat below expectations. Some see the results as a sign of weakening demand for Tesla's EVs.

In the earnings call today, Musk reassured investors: "I can't emphasize enough we have excellent demand for Q4 and we expect to sell every car that we make for as far into the future as we can see," he said. "The factories are running at full speed and we're delivering every car we make, and keeping operating margins strong."

In its statement, Tesla said it sees battery supply chain constraints as the "main limiting factor to EV market growth in the medium and long terms."

The company also noted that it plans to grow its manufacturing capacity "as quickly as possible." But while all its factories rolled off a record number of vehicles in the third quarter, transportation capacity during peak delivery periods was a challenge, according to the report.

Musk also said in the call with analysts that he expects Tesla to exceed Apple (Nasdaq: AAPL) in market cap. He added: "In fact I see a potential path for Tesla to be worth more than Apple and Saudi Aramco combined. That doesn't mean it will happen or will be easy."

The company is also discussing a share buyback for next year worth up to $10 billion.