Tesla Inc. fell after adjusted profit margins fell in the quarter as the electric automaker missed its quarterly revenue expectations.
It earned $2.5 billion, or 73 cents per share, in the first quarter, compared with $3.3 billion, or 95 cents per share, in the year-ago period. Adjusted for disposables, the company earned 85 cents per share.
Revenue rose 24% to $23.3 billion.
Analysts polled by FactSet expected Tesla to report adjusted earnings of 85 cents a share on sales of $23.6 billion.
“Though we have implemented price cuts across several vehicle models across regions
In the first quarter, our operating margins were reduced at a manageable rate,” Tesla said in a letter, adding they were 11%.
“We expect ongoing cost reductions in our vehicles, including improved manufacturing
Our new factories will focus on efficiency and lower logistics costs
Leverage works when we scale.”
The company said pricing “will evolve upward or downward depending on a number of factors.”
Ebitda margins fell to 18.3%, down from nearly 27% in the year-ago quarter.
The drop to 18.3% “doesn’t concern me at this point,” Bill Selesky at Argus Research said after the results. “I don’t see it as a big miss.”
The EV maker said it is “ahead” of its long-term target of producing 1.8 million vehicles by 2023, increasing its production rate by 50% annually.
Tesla’s electric pickup truck, the Cybertruck, is on track to begin production at a Texas plant later this year and Tesla continues to “progress” on its next-generation EV platform, according to the letter.
The company ended the quarter with $22.4 billion, $217 million more in investments and cash and equivalents than at the end of the fourth quarter.
The economics present a “unique opportunity” for the company, Tesla said in the letter.
Tesla “aims to leverage our position as a cost leader. We are focused on continuing to travel with our growth investments and investments in fast-growing manufacturing, autonomy and vehicle software.
Tesla unveiled a new round of U.S. price cuts on Wednesday in an effort to boost demand amid concerns about a weak economy, but will squeeze the company’s profit margins.
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In January, Tesla reported operating margins of 16% for the fourth quarter and 16.8% for the full year 2022. Tesla said last April that first-quarter 2022 margins were “over 19%.”
Tesla chalked up the decline in the first quarter to higher materials, logistics and warranty costs, lower debt earnings and ramping up production of new battery cells.
Tesla shares have fallen about 46% over the past 12 months, compared with losses of 7% for the S&P 500 index.
However, so far this year, the stock is up 49%, compared with an 8% advance for the S&P 500.