Tesla (NASDAQ:TSLA) Inc. has reported an end to its decade-long earnings streak in Q3 2023, with an Earnings Per Share (EPS) of 66 cents, falling short of expectations due to price cuts on vehicles that negatively impacted profits. Notably, Tesla has been consistently increasing its earnings per share, a strength highlighted by InvestingPro Tips. The company's total revenues for the quarter were $23,350 million, missing the consensus mark of $24,381 million, leading to a more than 4% drop in Tesla's shares.
A significant factor in these results was the declining gross and operating margins, which fell by 964 basis points year-on-year to 7.6%. This drop is largely attributed to the high costs associated with scaling up production of new battery cells and the Cybertruck. According to InvestingPro, Tesla operates with a high return on assets, a metric that likely suffered due to these increased costs.
Despite offering discounts, Tesla's U.S. EV market share slipped from 60% in Q1 to 50% in Q3. It's worth noting that all trims of Model 3/Y vehicles qualify for the full $7,500 federal tax credit under the Inflation Reduction Act. Tesla is a prominent player in the automobile industry, as noted by InvestingPro Tips.
On a positive note, Tesla produced 430,488 units in Q3, marking an 18% increase YoY. The company also delivered 435,059 vehicles, a YoY increase of 27%. Model 3/Y registered deliveries of 419,074 vehicles, marking a YoY growth of 29%.
Automotive revenues rose by 5% YoY to $19,625 million. Excluding revenues from leasing and regulatory credits, automotive sales were $18,582 million. The automotive gross profit stood at $3,668 million with an automotive gross margin of 18.6%.
Energy Generation and Storage revenues reached $1,599 million in Q3 2023 as a result of ramping up the Megapack factory. Energy storage deployments increased by a significant 90% YoY to reach 4 GWh. Solar deployments declined due to high-interest rates and the end of net metering in California.
Services and Other revenues amounted to $2,166 million, driven by supercharging, insurance, and body shop & part sales. As of September 30, 2023, Tesla's cash and cash equivalents stood at $26,077 million. InvestingPro Tips notes that Tesla holds more cash than debt on its balance sheet, a strong position for the company. Net cash provided by operating activities was $3,308 million in Q3 2023. Capital expenditure totaled $2,460 million in the same quarter, while free cash flow was $848 million during Q3 2023. Long-term debt and finance leases totaled $2,426 million.
Tesla currently carries a Zacks Rank #3 (Hold). In terms of real-time metrics from InvestingPro, Tesla has a market cap of $770.26 billion USD, a P/E ratio of 62.71, and a revenue of $94.03 billion USD. It's worth noting that Tesla has experienced a large price uptick over the last six months, despite the recent earnings report. For more detailed information and additional tips, investors can refer to InvestingPro.
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