Tesla beats earnings projections as SpaceX merger talk grows
Reported third-quarter revenue of $28.05 billion and adjusted earnings per share of $0.48, topping estimates cited by several outlets, though the comparison…
Tesla beats earnings projections for the third quarter, reporting revenue of $28.05 billion and adjusted earnings per share of $0.48, while CEO Elon Musk offered no new details on a potential merger with SpaceX. The results topped some Wall Street estimates, but comparisons vary across reports and Tesla’s automotive revenue fell from a year earlier.
The earnings matter to investors weighing Tesla’s vehicle business against its growing ambitions in artificial intelligence, robotics and autonomous driving. The company also reported free cash flow of $1.53 billion and cut its full-year capital expenditure guidance to $20 billion from $25 billion previously, according to Yahoo Finance.
Tesla’s revenue exceeded the $27.9 billion projection and earnings per share of $0.43 cited by The Guardian. Yahoo Finance reported a different comparison: revenue of $28.05 billion against a Bloomberg consensus of $28.13 billion, and adjusted earnings per share of $0.48 against an estimate of $0.44. The outlets also describe the earnings measure differently, so the figures should not be treated as identical estimates.
Tesla beats earnings projections, but auto revenue slips
The company’s revenue was below the $28.23 billion reported for the previous quarter, The Guardian said. Automotive revenue dropped 3% from the same period a year earlier, even as the overall results beat the estimates cited in that report.
Yahoo Finance reported Tesla’s free cash flow at $1.53 billion, compared with an estimated negative $4.92 billion. Capital expenditures were $4.732 billion, below the estimate of $7.96 billion. The company said the lower spending outlook reflected more efficient capital deployment and plans to fund investment primarily from operating cash flow, according to comments from Chief Financial Officer Vaibhav Taneja reported by Yahoo Finance.
The adjustment does not mean Tesla is abandoning investment. Yahoo Finance said the company expects spending to support Optimus production lines, AI computing, the Cybercab ramp and a Terafab chip plant Tesla is building with SpaceX.
That matters because Tesla’s financial performance increasingly depends on projects beyond vehicle sales. The spending figures give investors a view of how the company is balancing near-term cash generation with costly plans in automation and AI; the sourced reports, however, do not establish whether those projects will meet their targets.
SpaceX merger remains under discussion
Musk said the boards of both companies had formed special committees to examine a possible combination, but no terms had been agreed, The Guardian reported. Any merger would require approval from 50% of Tesla shareholders, according to the same report.
On Tesla’s earnings call, Musk declined to elaborate. “With regard to a potential merger with SpaceX, I think I said everything that should be said yesterday,” he said, referring to his earlier comments, according to The Guardian. He added: “I feel like I’m tap dancing through a minefield.”
Yahoo Finance reported that Musk described the idea as not certain and said it could be a good idea. The Guardian said Tesla’s call included no questions on the proposed deal, leaving investors without further detail about its structure or timing.
Tesla also said its Optimus robot had begun production at its Fremont factory, according to Yahoo Finance. Musk said reaching an annualized rate of 1 million units, or 20,000 units a week, would likely take at least a year and possibly longer. He also said the company may release a demonstration video in about a month.
The company’s next updates will have to clarify how its spending plans, robotics ambitions and any SpaceX discussions fit together; for now, the merger has no agreed terms and still requires shareholder approval.
Source: theguardian.com
