Tesla shares declined nearly 3% in after hours trading Wednesday after the company’s second quarter profit and margins missed analyst expectations despite record revenue and vehicle deliveries.
Tesla reported total revenue of $28.24 billion, up 26% from a year earlier and above the company compiled analyst consensus of $27.58 billion. Automotive revenue increased 23% to $20.52 billion, while energy revenue rose 13% to $3.14 billion.
Adjusted earnings came in at $0.33 per share, below the $0.55 consensus estimate. GAAP earnings reached $0.32 per share, compared with expectations of $0.36.
Operating income fell 57% from a year earlier to $398 million, leaving Tesla with an operating margin of 1.4%. Analysts had expected operating income of about $1.5 billion and a margin of 5.4%. Gross margin declined to 16.8%, below the 19.5% consensus estimate.
Tesla generated $4.7 billion in operating cash flow but reported negative free cash flow of $1.09 billion as capital expenditures more than doubled to $5.79 billion. Cash and short term investments declined by $1.2 billion during the quarter to $43.52 billion.
The company delivered a record 480,126 vehicles during the quarter, up 25% from a year earlier, while production increased 10% to 451,758 vehicles. Energy storage deployments rose 41% to 13.5 gigawatt hours.
Tesla said Cybercab production began at Gigafactory Texas and that its robotaxi service is now operating across seven major US metropolitan areas. The company also began installing its first Optimus production lines at the Fremont factory after removing the Model S and Model X lines.