Tesla (TSLA) Q1 2024 Earnings | Wilnesh News

Tesla On Tuesday, the company reported a 9% drop in first-quarter revenue, its biggest drop since 2012 and missing analysts’ expectations as the electric-car company weathered continued price cuts.

The stock rose in after-hours trading after Chief Executive Elon Musk told investors that production of new affordable electric vehicle models could come sooner than expected.

The company’s report compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):

• Earnings per share: Adjusted 45 cents, expected 51 cents
• income: $21.30 billion vs. $22.15 billion expected

Revenue fell from $23.33 billion in the same period last year and $25.17 billion in the fourth quarter. Net income fell 55% to $1.13 billion, or 34 cents a share, from $2.51 billion, or 73 cents a share, a year ago.

The sales drop was even steeper than the company’s last decline in 2020, which was caused by production disruptions during the Covid-19 pandemic. In the first three months of 2024, Tesla’s automotive business revenue fell 13% year-on-year to $17.38 billion.

Musk said on the conference call that the company plans to start production of the new model “in early 2025, or even the end of this year”, having previously expected to start production in the second half of 2025. , and said it was in talks with “a major automaker” to license its driver assistance system, which is marketed in the United States as a Fully Self-Driving (FSD) option.

In its shareholder deckTesla reiterated its pessimistic outlook for 2024, telling investors that “sales growth is likely to be significantly lower than the growth achieved in 2023.”

Before rising 11% after hours, Tesla shares had fallen more than 40% this year to their lowest level since January 2023 on concerns about weak deliveries, Chinese competition and the company’s continued price cuts. Earlier this month, Tesla announced an 8.5% year-on-year decrease in vehicle deliveries in the first quarter.

In its presentation, the company said it was accelerating the rollout of “new vehicles, including more affordable models” that would “be able to be produced on the same production lines as Tesla’s current product line.” Tesla’s goal is to “fully utilize” existing production capacity and achieve “more than a 50% increase in production over 2023” before investing in new production lines.

Also on deck, Tesla showed off screens for a robotaxi-based ride-hailing service. The company has been promising self-driving cars for years but has failed to deliver on Musk’s promises.

Sales growth of electric vehicles is slowing, and Tesla and major rivals have been slashing prices on their vehicles to stimulate demand. Tesla’s first-quarter gross profit plunged 18%, in part due to price cuts this year.

“We think Q2 is going to be much better,” Musk said on the call after discussing operational challenges in the first quarter, including Red Sea supply chain disruptions.

Tesla said total sales include revenue from early sales of the FSD option. A feature called Autopark, launched in North America, allows the company to recognize deferred revenue.

Siena Capital auto analyst Chris Redl estimates that Tesla will recognize as much as $700 million in deferred revenue from FSD this quarter. Excluding regulatory credits, this represents approximately 4.3% of Tesla Motors revenue.

Tesla began a massive reorganization this month with the resignations of two top executives, Drew Baglino and Rohan Patel. Musk said in a company-wide memo last week that the automaker would cut more than 10% of its global workforce.

Capital expenditures increased to US$2.77 billion, an annual increase of 34%.

Free cash flow turned negative during the quarter, and the company reported a $2.53 billion deficit. A year ago, Tesla reported free cash flow of $441 million, and in the fourth quarter, the figure reached $2.06 billion. Tesla attributed the negative figure to $2.7 billion in inventory accumulation and $1 billion in “artificial intelligence infrastructure” capital expenditures.

Tesla’s energy division revenue increased 7% year-on-year to US$1.64 billion, and service and other revenue increased 25% year-on-year to US$2.29 billion.

Musk was asked on the earnings call whether he planned to leave Tesla given his multiple jobs, including leading SpaceX, controlling X (formerly Twitter) and running other businesses.

Musk didn’t have an answer, but said he works most days, rarely even taking Sunday afternoons off, and will work hard to ensure Tesla is “very prosperous.”

At the end of the call, Tesla Vice President of Investor Relations Martin Viecha said that he leave the company Within a few months after seven years. Musk thanked him.

Correction: Auto sales data in a previous version of this story was incorrect.

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