Tesla Q3 revenue skirts semiconductor woes, beats profit projections

Tesla Inc. reported third-quarter revenue that fell short of Wall Street estimates but managed to beat profit projections, overcoming a semiconductor shortage and supply-chain challenges that have stymied competing automakers.
 

The results mark the ninth straight quarter of profit for the 18-year-old electric carmaker and came despite obstacles that included backups at ports and even rolling blackouts in China that made it tough to keep factories operating at full capacity.

Revenue at Elon Musk’s electric-vehicle and clean-energy company rose 57% to $13.8 billion, missing estimates of $13.9 billion. Earnings came to $1.86 a share on an adjusted basis, the Palo Alto, California-based automaker said Wednesday. That beat the $1.67 a share average of analysts’ estimates.

Tesla said supply-chain issues ranging from semiconductor shortages to congestion at ports hurt its ability to boost output and meet growing demand for its EVs.

For the first time in over a decade -- Tesla went public in 2010 -- Musk, the company’s chief executive officer, didn’t participate in the quarterly call with analysts, making good on his promise in July that he would be unlikely to join going forward. Instead, Zachary Kirkhorn, chief financial officer, led the discussion, and was joined by two of Tesla’s top automaking executives: Drew Baglino, senior vice-president of powertrain, and Lars Moravy, vice president of vehicle engineering.

“We’re trying as far as we can to maximize that capacity and to be able to meet the demand that we’re receiving,” said Kirkhorn, who spoke of a “profound awakening” when it comes to consumer interest in electric cars. “But the net, net of all this is that we’re not able to increase production capacity fast enough.”

Shares of Tesla fell more than 1% in extended market trading. They were little changed at $865.80 at the close in New York and have gained 23% this year. 

The company’s automotive gross margin, a key gauge of profitability, widened to 28.8% in the latest quarter when regulatory credits are excluded. 

“The stock is zig-zagging because this was expected,” said Gene Munster of Loup Ventures. “But they are making a lot of progress when it comes to profitability.”

Tesla is expanding on three continents and is nearing completion of new factories in Austin, Texas, and Berlin. At its shareholder meeting earlier this month, Musk said his company will move its corporate headquarters to Austin, without giving a date. 

Tesla delivered 241,300 cars worldwide in the third quarter, a record for the company. Tesla currently makes the Model S, X, 3 and Y at its factory in Fremont, California, and the Model 3 and Y at its plant in Shanghai. More than 96% of sales in the quarter were the Model 3 and Y.  The Austin plant will make the Model Y and then the Cybertruck, which is slated for late next year. 

Revenue from regulatory credits came to $279 million, Tesla said, down from $354 million three months earlier. The company also reported a $51 million Bitcoin impairment.