Tesla earnings beat projections after Musk floats SpaceX merger
Tesla reported better-than-expected third-quarter earnings on Wednesday, with revenue of $28.05bn and $0.48 in earnings per share, hours after CEO Elon Musk floated a potential merger with SpaceX.
Tesla earnings beat projections after Musk floats SpaceX merger
Tesla's third-quarter earnings beat Wall Street projections on Wednesday, with revenue of $28.05bn and earnings per share of $0.48, against forecasts of $27.9bn and $0.43. The results arrived hours after chief executive Elon Musk raised the prospect of combining the car company with SpaceX, the rocket and AI business he also leads.
Earnings beat Wall Street expectations
The company reported revenue of $28.05bn and $0.48 on earnings per share, ahead of the $27.9bn and $0.43 analysts had projected.
- Total revenue was slightly below the previous quarter's $28.23bn
- Automotive revenue dropped 3% from the year prior
- Tesla's report said it maintained strong momentum on projects spanning Super Intelligence, robotics and renewable energy
Musk floats Tesla-SpaceX merger
Ahead of the earnings call, Musk said on a SpaceX investor call on Tuesday that combining the two companies would be a good idea with a lot of merit. He told investors that boards of both businesses had formed special committees to explore the potential merger, with no agreement yet reached on terms. Any deal would require the approval of 50% of all Tesla shareholders.
On the call, Musk declined to elaborate. "With regard to a potential merger with SpaceX, I think I said everything that should be said yesterday," Musk, the CEO of both companies, said. He also repeated a phrase he had used on Tuesday: "I feel like I'm tap dancing through a minefield."
Roadster 2 demo and future bets
Last week Musk unveiled the Roadster 2, an electric sports car priced upwards of $200,000 that he said uses SpaceX technology to "basically fly like a rocket". At a Texas SpaceX facility, a remote-controlled Roadster drove up a steeply curved ramp and used jet-like thrusters to flip over, hover and land.
"Flying cars are real … It can basically fly like a rocket, it can do rolls, crazy gymnastics," Musk said at the event, adding he was not sure it is legal in all jurisdictions. On the earnings call he called it "the coolest demo of any product ever".
Elsewhere the company's bets have stumbled: the Optimus robot has faced production hurdles, and the Robotaxi driverless taxi service has hit roadblocks scaling its fleet and expanding to new cities. Musk had said "probably half the population of the US" would use the autonomous ride-hailing service by the end of 2025, and forecast up to 1m Optimus robots per year - targets not reached.
On Wednesday he stood by his robot claims: "I remain convinced that Optimus will be the biggest product on earth and humanoid robots in general will be the biggest product on earth."
Forrester principal analyst Paul Miller said Tesla robotaxis are carrying passengers, but "not yet at anywhere near the levels the company promised".
Stock under pressure
Tesla's share price has fallen by more than 11% this year amid competition from cheaper Chinese automakers, though it has rebounded somewhat since last week on the merger news.
Special committees at both boards continue to explore the potential merger, with no agreement yet on terms and Tesla shareholder approval still required.
