Tesla posted a solid quarter of record earnings and revenue, but now says it will fall short of its target of 50% growth in the number of cars it sells this year.
In July, the company said it was still targeting a 50% growth target from the 936,000 cars delivered in 2021. But with two-quarters of disappointing deliveries caused by supply chain issues and Covid-19-related shutdowns in China, it would have was a reach to reach that goal for 2022.
The company had previously reported that it delivered 344,000 cars in the third quarter, a record for the company and a 42% increase from a year earlier. But it would have to deliver 495,000 more cars in the fourth quarter to reach the 50% growth target.
Telsa still has a fraction of the sales of established automakers. But it is by far the most valuable automaker in the world, worth more than the top 10 automakers in terms of sales volume. Its fast pace of growth is one of the things driving this high valuation of stocks.
The company is still “looking forward to a record fourth quarter,” CEO Elon Musk said in an investor call on Wednesday. “So really, knock on wood, it looks like we’re going to have an epic end to the year.”
But while the company said that “over a multi-year horizon, we expect to achieve an average annual growth of 50% in vehicle deliveries”, CFO Zach Kirkhorn admitted during the call with investors that “on the delivery side, we expect to be just below 50% growth due to an increase in cars in transit towards the end of the year”.
This was a step back from what the company was saying in July, when Kirkhorn said, “Despite losing more builds in the third quarter than expected, we are still striving to achieve 50% growth this year. That goal has become more difficult, but it remains possible with strong execution.”
Musk insisted the missed target is the result of a logistics problem, as the company had trouble finding the number of ships, trains and transport trucks needed to make deliveries by the end of the quarter.
“We have excellent demand for the fourth quarter,” Musk said. “The factories are running at full speed and we are delivering every car we make.”
The company reported adjusted earnings of $3.7 billion, up 75% from a year ago but still 2% below the record profit reported in the first quarter. It was better than earnings of $3.5 billion predicted by analysts polled by Refinitiv.
Revenue hit a record $21.5 billion, up 56% from a year earlier but below the $22 billion forecast by analysts.
Tesla shares fell about 4% in post-market trading after the result. They had already lost 37% so far this year as of Wednesday’s close.
In an effort to boost the company’s stock price, Musk told investors that the company “is likely” to make a share buyback “on the order of $5 billion to $10 billion” worth of its shares.
The company never made a share buyback. Instead, with stock prices rising in the past, she often sold additional shares to build up her cash reserves.
The stock briefly pared its aftermarket losses when Musk mentioned the buyback, only to see the stock lose even more ground after the company strayed from its sales growth target of 50%.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
