tesla-q3-2022-earnings:-income-miss-takes-a-toll

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As Tesla (NASDAQ:TSLA) contends with a veritable volley of short-term challenges, starting from Musk’s Twitter takeover overhang to uncertainty across the outlook for fourth-quarter deliveries amid weakening international demand, the EV large has now introduced its earnings for the third quarter of 2022.

Tesla (NASDAQ: TSLA) Q3 2022 Earnings

Tesla has reported $21.454 billion in income for the third quarter of 2022, lacking consensus expectations of $21.96 billion.

(All figures are in billions of {dollars})

Tesla recognized US greenback energy as a significant problem to its top-line metric throughout the quarter.

The next snippet summarizes the EV large’s manufacturing actions throughout the interval:

Tesla Q3 2022 Earnings: Income Miss Takes a Toll

Tesla Operations Abstract

The corporate has reported automotive gross margin of 27.9 % throughout the quarter.

(All figures are percentages)

Tesla has reported $1.05 in non-GAAP (adjusted) EPS, beating consensus earnings expectations of $1 per share.

(All figures are in {dollars})

The corporate has recognized larger uncooked materials prices and manufacturing ramp up of 4680 cells as main challenges to its bottom-line metric throughout the quarter.

The next snippet summarizes Tesla’s newest steerage:

Tesla Q3 2022 Earnings: Income Miss Takes a Toll

Tesla Steerage

Whereas revealing its earnings for Q2 2022, Tesla notified that it liquidated 75 % of its Bitcoin stash by the tip of the quarter, with such disposals netting $936 million in Q2 alone. Elon Musk, nonetheless, did present a qualifier that Tesla would possibly once more begin including to its Bitcoin stash sooner or later and that the corporate nonetheless held all of its stake in Dogecoin. In its newest earnings launch, Tesla has not supplied any updates on its Bitcoin holdings.

Heading into Q3 2022 earnings, there was a roughly 50-50 chance that Tesla would announce a share buyback program to offset the Twitter overhang. We’ll update this part if we hear something on that entrance.

Tesla Q3 2022 Earnings: Income Miss Takes a Toll

On the time of writing, Tesla shares are down almost 4 % in after-hours buying and selling as the corporate missed consensus income expectations.

Earnings Context

$TSLA traders asking about Gordon Haskett report that Musk nonetheless $8B fairness quick to finish $TWTR deal. I est $5.4B wanted incl. RSUs. Many fail to excl 73.1M TWTR shares Musk owns. Not clear if Elon has margin capability (TSLA coverage 25% max margin) with TSLA -42% since April. pic.twitter.com/sFnB3fLByL

— Gary Black (@garyblack00) October 18, 2022

Aside from the continued carnage within the broader market, Tesla shares are at present affected by two vital short-term challenges. First, as we famous in a devoted publish, Elon Musk has to safe $24.51 billion in fairness financing for his Twitter takeover deal. Thus far, he has accrued $15.4 billion by promoting part of his Tesla stake in two distinct liquidation waves, with the primary one occurring in April – Might and the second happening again in August. He has additionally secured $7.1 billion in fairness commitments from the likes of Larry Ellison, Binance, Sequoia, the Saudi Prince Al Waleed, and so forth. Nonetheless, this nonetheless leaves a $2 billion deficit with out accounting for Twitter’s RSUs – which is able to enhance the funding shortfall to round $5.4 billion. Musk will doubtless plug this shortfall by additional paring his Tesla stake, therefore the present downward stress on the inventory.

So far as the second main headwind is anxious, Tesla missed analyst expectations relating to its Q3 deliveries. Whereas the quarterly manufacturing at 365,923 got here in larger than Bloomberg’s estimate of 359,853 items, the reported deliveries of 343,830 items missed the consensus variety of 357,938. Tesla cited logistical constraints for falling quick on its quarterly deliveries. Nonetheless, given the continued international macroeconomic weak point and the softening of demand, particularly in China, which is a vital marketplace for Tesla, the inventory has remained beneath stress up to now this month.