Tesla tops analysts’ estimates for earnings and revenue in the fiscal third quarter

Tesla tops analysts’ estimates for earnings and revenue in the fiscal third quarter
Written by:
Wajeeh Khan
22nd October, 09:56
  • Tesla tops analysts’ estimates for earnings and revenue in the fiscal third quarter.
  • The electric car manufacturer values regulatory credits at £303.07 million in Q3.
  • The Palo Alto-based company to spend £1.91 billion in the next two fiscal years.

Tesla Inc. (NASDAQ: TSLA) published its earnings report for the fiscal third quarter on Wednesday. It was the fifth quarter in a row that the electric car maker concluded in profit. Tesla’s profitability, however, remained largely attributed to regulatory credit sales in Q3, much like in the previous three quarters as well.

Shares of the company were reported about 3.5% up in after-hours trading on Wednesday. Tesla is now exchanging hands at £333 per share, after recovering from a year to date low of £55.15 per share in March, when the impact of the Coronavirus pandemic was at its peak.

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Tesla’s Q3 financial results versus analysts’ estimates

Tesla valued regulatory credits at £303.07 million in Q3, representing a close to 100% increase on a year over year basis, that resulted in a quarterly profit of £252.69 million. In an earlier report published in the first week of October, the Palo Alto-based company had already revealed 139,300 vehicle deliveries in the third quarter that marked a record high.

According to Refinitiv, analysts had expected the company to print £6.38 billion of revenue in the fiscal third quarter. Their estimate for earnings per share was capped at 43.51 pence. In its report on Wednesday, Tesla topped both estimates posting a higher £6.70 billion of revenue and 58.02 pence of earnings per share in Q3.

In its financial report on Wednesday, Tesla registered £5.80 billion of revenue from its automotive segment that made up roughly 91% of its total quarterly revenue. Excluding regulatory credits, automotive gross margins stood at 23.7% in Q3.

Tesla to spend £1.91 billion in the next two years

At £950 million, operating expenses, as per Tesla, came in 33% higher in the recent quarter, attributed primarily to the new factories that it is building in Brandenburg, Germany, and Austin, Texas. Tesla has slashed price for its premium Model S sedan twice this month.

For the next two years (fiscal 2021 and 2022), CFO Zachary Kirkhorn said Tesla was likely to spend roughly £1.91 billion – significantly higher than the company’s previous estimate, due to its expansion plans, including the new factories.

The U.S. electric carmaker reiterated its guidance on Wednesday and said it was targeting half a million vehicle deliveries in 2020. At the time of writing, Tesla has a market cap of £300.64 billion and a price to earnings ratio of 1,087.43.

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