Tesla's earnings beat, rosy forecast push shares more than 11% higher

Investing.com -- Tesla reported third-quarter results that beat Wall Street estimates and said it expects to achieve "slight" growth in deliveries this year, sending shares in the electric vehicle maker higher by more than 11% in premarket US trading.  

Adjusted net income for the quarter increased by 8% compared to the year-ago period to $2.5 billion, topping estimates of $2.1 billion, thanks to a dip in operating expenses and a demand-boosting drop in prices. Revenue, meanwhile, surged by 8% to $25.2 billion, but just undershot Wall Street forecasts.

Crucially, gross margins excluding credits, a closely watched performance metric, rose to 17.05% from 14.7% in the prior quarter, an improvement partly driven by declining manufacturing costs and freight expenses.

"[T]his is clearly an indication that [Tesla Chief Executive Elon] Musk [and company] [are] continuing to focus on its profitability side while balancing its plans for the future," analysts at Wedbush said in a note to clients. They added that the margins figure will bolster hopes Musk can pull off a planned transition of Tesla (NASDAQ:TSLA )'s major focus to artificial intelligence and autonomous driving.

In a statement, Tesla said that it expects to achieve "slight growth" in vehicle deliveries in 2024, while Musk predicted cost cuts and lower interest rates would spur vehicle sales growth of 20% to 30% next year. Tesla also noted that preparations for new vehicle launches remain underway, adding it continues to expect to roll out more affordable models in the first half of 2025.

The results come as Tesla has spent several prior quarters grappling with a host of issues, including perceived sluggishness in global EV demand and a legal battle over Musk's pay package. Musk's political stance, as well as a high-profile unveiling of Tesla's "Cybercab" robotaxi that received tepid reviews from analysts, have also been in the spotlight. Tesla's shares have slipped by 14% so far this year.

(Yasin Ebrahim contributed to this report.)

Source: Investing.com