Tesla reported lower quarterly profit on October 21, while spending less than expected helped the US electric vehicle maker generate positive free cash flow. Results for the three months ended September 30 put its earnings and investment plans in focus as it considers a possible combination with SpaceX.
The Austin, Texas-based company recorded net income of $787 million, compared with $1.373 billion a year earlier, according to S&P Capital IQ. Tesla’s financial update showed revenue of $28.046 billion against $28.095 billion in the same period last year, leaving sales almost unchanged.
Reuters reported free cash flow of $1.53 billion, compared with expectations for a $4.92 billion cash outflow. Capital expenditure reached $4.73 billion, below an expected $7.5 billion and the previous quarter’s $5.79 billion, but above the $2.25 billion spent a year earlier. The figures show investment remained substantial despite falling short of forecasts.
According to AP, Tesla reduced its full-year capital spending estimate from $25 billion to $20 billion during its earnings call. Morningstar analyst Seth Goldstein told AP that delaying longer-term projects appeared to help the company fund its artificial intelligence expansion from its own resources. That assessment concerns spending timing rather than a guaranteed return on investment.
Tesla had previously reported delivering 486,532 vehicles and deploying 13.7 gigawatt-hours of energy storage products in the quarter. Its October 2 release cautioned that deliveries and deployments alone do not determine financial performance, which also depends on selling prices, costs and currency movements.
The outlook also includes an unresolved merger question. Reuters reported that Tesla and SpaceX formed special committees to examine a combination. Musk said no transaction terms had been agreed and a deal was not certain. The committees’ work and shareholder support remain central to whether the two companies proceed.
Comments