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Founded in 1993 by brothers Tom and David Gardner, The Motley Fool is helping millions of people achieve monetary freedom through our website, podcasts, books, newspaper columns, radio shows and premium investment services.
Motley Fool Issues Alert of Infrequent Buying ‘All In’
Last week, electric vehicle pioneer Tesla (TSLA-5. 64%) released a sometimes solid third-quarter report, earnings were slightly lower than Wall Street expected.
Revenue rose 56% year-over-year to a quarterly record of $21. 45 billion, driven by a 55% increase in automotive revenue to $18. 7 billion. The Street is seeking total revenue of $21. 96 billion.
Tesla also set quarterly records for vehicle production and deliveries, which rose 54% and 42%, respectively, year-over-year. Adjusted earnings consistent with consistent percentage rose 69% year-over-year to $1. 05, beating analysts’ consensus estimate of $1. 00.
Earnings posts only tell part of the story. Here are two key things controlling Tesla’s third-quarter earnings call that investors deserve to know.
According to CEO Elon Musk’s comments:
We will deliver our first production of Tesla Seedling to Pepsi on December 1st. . . We provisionally have 50,000 games in 2024 for Tesla Semi in North America. And, of course, we will expand beyond North America.
The Tesla Semi is an all-electric heavy-duty truck (Class 8) that the company introduced in 2017. It had planned to start producing this vehicle in 2019, but pushed back the date so it could concentrate for a while. in the manufacture of Model 3 sedans, which have generated a massive demand from customers.
Earlier this month, Musk tweeted that the company had begun production of the Semi and would deliver the first batch to PepsiCo on Dec. 1. He did not specify in that tweet or in the earnings call how many games there would be in the initial installment. The food and beverage giant reportedly booked a hundred semi-trailers shortly after Tesla unveiled the vehicle.
During the call, Musk clarified that the 500-mile diversity of the Tesla Semi is with shipping and travels on a flat road. Yes, you’re wondering how much shipping you can carry while achieving that 500-mile diversity. But regardless of the exact weight, the main point is that an all-electric heavy-duty truck with a diversity of about 500 miles is expected to generate significant demand. That is, assuming that this truck performs well in general and that its value is not astronomical.
According to Musk’s comments:
[To transfer to sustainable energy], you need solar [and] wind power with the desktop battery to buy the energy so that you have power 24/7. [It’s] because the wind doesn’t blow all the time and the sun does. Don’t shine all the time. We see the electric garage sector, desk garages, developing through more than 150% to 200% consistent with the year, much faster than automobiles.
For context, in the third quarter, Tesla’s power generation and garage profits grew 39% year-over-year to $1100 million, or about 5% of total profit. By comparison, profits in the core automotive sector increased 55% year-over-year. year.
Growth in the power generation and garage segment was driven through a 66% increase in power garage capacity deployments to a record 2. 1 gigawatt hours (GWh). However, it is important to note that demand for Tesla’s garage strength products has outpaced the company’s ability. to produce them. The global semiconductor shortage hurts its powershop business more than its auto business, according to Tesla’s third-quarter letter to shareholders.
On the call, Chief Financial Officer Zachary Kirkhorn said the energy segment posted its highest gross profit in the third quarter, driven mainly by record volumes of Megapack and Powerwall desktop garage products. That metric was $104 million, according to my calculations. That’s just 1. 9% of Tesla’s overall third-quarter gross profit of $5380 million, but at least the energy segment posted a gross profit. That was not the case.
Beth McKenna has no position on the above. The Motley Fool has positions and recommends Tesla. The Motley Fool has a disclosure policy.
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