Tesla Stock Falls After Mixed Q2 Earnings
Tesla stock came under pressure in after-hours trading on Wednesday after the electric vehicle manufacturer reported mixed second-quarter financial results. Although revenue exceeded Wall Street forecasts, weaker-than-expected earnings and adjusted EBITDA overshadowed the company’s strong delivery growth and expanding physical artificial intelligence operations.
Tesla stock ended the regular trading session at $374.01, down 1.30%, from the previous closing price of $378.93. The decline accelerated after the company released its quarterly results, with the stock falling another 4.13% to approximately $358.55 in after-hours trading.
Tesla stock price (Source: Google Finance)
The share price traded close to $380 earlier in the session before gradually moving lower.
Tesla Revenue Beats Estimates, but Earnings Disappoint
Tesla reported second-quarter revenue of $28.24 billion, comfortably above the Bloomberg consensus estimate of $26.32 billion. Revenue increased 26% compared with the same period last year, supported by stronger vehicle deliveries and growth in the company’s energy business.
However, Tesla’s profitability figures disappointed investors. Adjusted earnings per share came in at $0.33, well below the $0.50 analysts had expected. Adjusted EBITDA reached $3.27 billion, compared with Wall Street’s forecast of approximately $4 billion.
The weaker earnings performance helps explain why Tesla stock fell despite the revenue beat. Investors may also be concerned about the company’s margins, capital requirements and the cost of expanding its Robotaxi, artificial intelligence and humanoid robot businesses.
Tesla Q2 0226 earnings highlights
One encouraging aspect of the report was that Tesla’s cash burn was lower than expected. This could provide the company with more flexibility as it invests in AI infrastructure and new manufacturing projects.
Strong Deliveries Support Tesla’s Revenue Growth
Tesla delivered 480,126 vehicles during the second quarter, which was a 25% increase from a year earlier. Deliveries also exceeded the Bloomberg consensus estimate of 397,466 vehicles.
(Source: Tesla)
Energy storage deployments reached 13.5 gigawatt-hours, more than 50% higher than the 8.8 gigawatt-hours reported in the first quarter.
Tesla’s regional sales performance was mixed. US demand has reportedly been affected by the expiration of the federal electric vehicle tax credit, with Cox Automotive forecasting a 20% decline in domestic Tesla sales. International markets provided stronger support. Registrations in Greater Europe increased nearly 108% in May, while European Union registrations more than doubled.
The next direction for Tesla stock will likely depend on whether the company can translate strong vehicle deliveries and AI ambitions into improved earnings.