Tesla Stock Earnings: TSLA loses 4.2% afterhours despite double beat as gross margin slides

Tesla reported Q2 earnings late Wednesday that beat the analyst consensus.
Q2 adjusted EPS arrived at $0.91 for the carmaker.
Elon Musk's company reported revenue of $24.93 billion.
Revenue rose 47% from the same quarter a year ago.
Gross margin dropped to 18.2% in the second quarter.

Clay Webster FXStreet

Tesla (TSLA) stock slid 4.2% afterhours to $279.07 on Wednesday evening as the electric vehicle industry's first-mover saw its gross margin slip to 18.2% in the second quarter. Analysts held a consensus going into Q2 that Tesla would retain a gross margin of 18.8% in its automotive division. Tesla's gross margin was down about 7 percentage points from a year ago.

CFO Zachary Kirkhorn said at the beginning of the year that Tesla was aiming to keep its autmotive gross margin at or above 20%. Since then Tesla has cut prices across its offerings several times in a bid to boost market share.

Tesla still beat Wall Street expectations on the top and bottom lines for the second quarter however. Tesla reported $0.91 in adjusted earnings per share (EPS), while revenue arrived at $24.93 billion. The earnings figure beat analyst consensus by 9 cents, and revenue bested the average forecast by about $200 million.

Free cash flow rose from $441 million in Q1 to circa $1 billion in the second quarter. Capital expenditures of $2.06 billion were largely in line with the first quarter.

In early July, the Elon Musk-run company already released data showing 466,140 deliveries in the second quarter, a 10% gain on the first quarter. While deliveries rose 83% YoY in Q2, revenue rose just 47% due to tighter margins.

TSLA daily chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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