Tesla (TSLA) releases Q3 earnings: surprisingly large profit, miss on revenue

Fred Lambert | Oct 23 2019 - 4:57 pm PT

Tesla has released its financial results and shareholders letter for the third quarter of 2019 after market close today.

We are updating this post with all the details from the financial results, shareholders letter, and the conference call later tonight.

As we reported in our Q3 earnings preview post earlier today, Wall Street was expecting revenue of about $6.517 billion for the quarter and a loss of $0.15 per share.

Tesla announced that it made $6,3 billion in revenue and it reported surprising profits of $1.91 per share (Non-GAAP) – just below expectation for revenue and way over expectations for earnings.

Revenue is down year-over-year for the first time in a while.

Tesla explains:

“Compared to Q3 of 2018, the percentage of leased vehicles has tripled and alone has impacted revenue by the majority of the YoY decrease. Model 3 mix has increased while we have taken actions leading to the reduction of the ASP of our products. These ASP reductions are particularly impacted by the launch of the Standard Range trims of Model 3 and pricing actions earlier in the year.

They still managed to deliver a profit, to the surprise of many, due to significantly improved

The automaker explained in its shareholders letter:

“GAAP Automotive gross margin improved by 393bp QoQ to 22.8% (improved by 366bp QoQ excluding regulatory credits). Margin was impacted in part due to fundamental improvements in our operating efficiency, including higher fixed cost absorption, reductions in manufacturing and material costs and continued improvements in vehicle quality and in part due to Smart Summon-related deferred revenue recognition, FX and other non-recurring items. Improved gross profit combined with a decline in operating expenses resulted in material improvement of GAAP net income.”

The stock was up more than 17% in aftermarket trading when Tesla reported the beat.

Here we will be posting our follow-up posts about the earnings and conference call to expand on the most important points (refresh the page to see the most recent posts):

Here’s Tesla’s Q2 2019 shareholder letter in full:

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