Elon Musk, CEO of Tesla and owner of the social networking site
Gonzalo Fuentes | Reuters
Tesla The electric car company reported a 9% drop in first-quarter revenue on Tuesday, the biggest decline since 2012, and missed analyst estimates, as the electric car company weathers the impact of ongoing price cuts.
Here are the results.
Earnings per share: 45 cents adjusted versus 51 cents per share expected by LSEG Revenue: $21.30 billion versus $22.15 billion expected by LSEG
Revenues fell from $23.33 billion a year earlier and from $25.17 billion in the fourth quarter. Net income fell 55% to $1.13 billion, or 34 cents per share, from $2.51 billion, or 73 cents per share, a year earlier.
The decline in sales was steeper than the company's last decline in 2020, which was then due to a production halt during the Covid pandemic. Tesla's vehicle revenue fell 13% year over year to $17.34 billion in the first three months of 2024.
In a shareholder group, Tesla reiterated its pessimistic outlook for 2024, telling investors that “the volume growth rate may be significantly lower than the growth rate achieved in 2023.”
Tesla shares have fallen more than 40% this year on concerns about weak deliveries, competition in China and the company's ongoing price cuts. Earlier this month, Tesla reported an 8.5% year-over-year decline in vehicle deliveries during the first quarter.
The stock, which is trading near its lowest levels since early 2023, rose about 5% in extended trading after the report.
The company said in the presentation that it is working to accelerate the launch of “new vehicles, including affordable models,” which “will be able to be produced on the same manufacturing lines” as Tesla’s current lineup. Tesla aims to “take full advantage” of its current production capacity and achieve “growth of more than 50% compared to 2023 production” before investing in new manufacturing lines.
Tesla's energy division revenues increased by 7% to $1.64 billion, while services and other revenues increased by 25% to $2.29 billion compared to the same period last year.
Sales growth across electric vehicles is slowing, and Tesla and major competitors have been reducing EV prices, both on and offline for several months, in an attempt to stimulate demand. Tesla's overall profits fell 18% in the first quarter, partly due to price cuts throughout the beginning of the year.
Tesla embarked on a massive restructuring this month with the resignation of two executives, Drew Baglino and Rohan Patel. Last week, Musk said in a company-wide memo that the automaker would cut more than 10% of its global workforce.
Capital expenditures rose to $2.77 billion, an increase of 34% over the previous year.
Free cash flow turned negative in the quarter, with the company reporting a deficit of $2.53 billion. A year ago, Tesla reported free cash flow of $441 million, a number that reached $2.06 billion in the fourth quarter. Tesla attributed the negative number to a $2.7 billion inventory backlog and $1 billion in capital expenditures on “artificial intelligence infrastructure.”
The earnings call is scheduled to be broadcast live at 5:30 PM ET.
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