Earnings at Musk's car company fall as research spending cut into profit from selling cars
Tesla said Wednesday that its profits fell last quarter as the car company run by Elon Musk shoveled more money into research and development, cutting into profits from a sharp increase in vehicle sales.
The Austin, Texas, company reported second-quarter net income of $1.11 billion, or 32 cents per share. That is compared to earnings of $1.17 billion, or 33 cents per share, in the same quarter last year.
Excluding certain charges, earnings were 33 cents per share, down from 40 cents per share in the prior-year quarter. That fell short of the 53 cents per share forecast by Wall Street analysts, according to FactSet.
Revenue rose 26% to $28.24 billion, beating analysts’ forecast of $26.42 billion.
Spending on research and development surged about 49% from a year earlier to $2.37 billion.
Tesla shares fell 2.7% to $363.98 in after-hours trading shortly after it released its latest results. The stock ended the regular trading session 1.3% lower and is down just under 17% this year.
Earlier this month, Tesla reported that it delivered 480,216 cars in the second quarter, a 25% increase from the same period last year and its second straight quarterly gain. The sales also exceeded analysts’ expectations, according to a FactSet survey.
Tesla’s improving sales this year mark a big turnaround from a year ago, when many Europeans refused to buy the company’s cars because of Musk’s embrace of far-right political candidates in elections there.
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