The single most popular international stock among Kiwi retail investors reported its Q1 earnings this morning.
US automaker Tesla, run by chief executive – aka technoking – Elon Musk, announced to the market that it had posted a US$438 million first-quarter profit on the back of strong electric vehicle sales.
The result for the three-month period ended March 31 was built on the sale of 185,000 vehicles, more than double the number sold a year ago.
All but 2,000 of the sales were lower-priced Model 3 sedans and Model Y SUVs. Tesla said it didn’t produce any of its higher priced Model S sedans and Model X SUVs as it switched to new versions during the quarter.
Excluding stock-based compensation and non-recurring items, Tesla made 93 cents per share. That beat Wall Street estimates of 75 cents per share, according analysts polled by data provider FactSet. First-quarter revenue of US$10.39 billion fell just shy of the US$10.48 billion expected by analysts.
Once again the company needed regulatory credits purchased by other automakers in order to make a profit. Without US$518 million in credits for the quarter, Tesla would have lost money. Other automakers buy the credits when they can’t meet emissions and fuel economy standards.
Tesla said adjusted net income, excluding stock-based compensation, passed $1 billion for the first time in company history.
The company, which also makes solar panels and batteries, made only $16 million in the first quarter of 2020.
Tesla, which now has the sixth-largest market value of all companies in the S&P 500 at $708.56 billion, saw its shares fall about 3 per cent in extended trading Monday. The company released numbers just after the markets closed.
The company’s performance has become particularly relevant to the local market, given the number of Kiwis investing in its stock.
Approximately 26.7 per cent of Kiwi customers on the Hatch platform have invested more than $750 million in Tesla, making it the most popular stock on offer.
Hatch general manager Kristen Lunman says she doesn’t expect the stock to surge or drop too significantly today given the results met expectations.
She did, however, not that there are some important questions that will be hanging over the company in the coming years.
Local investors were able to send in questions on a variety of issues affecting the company.
“There is a huge surge in people wanting to be involved, a real excitement around the shareholders,” Lunman said.
Kiwi investors will tune into the briefing around 9.30am NZ time.
Lunman said she expected the briefing to focus on the company’s future plans including how it was addressing supply chain issues such as the global computer chip shortages which had seen chips diverted away from car manufacturers like Tesla.
“The insiders will have a sense of how they will overcome some of those challenges.”
Lunman said she also expected discussion to centre around the new plants it had opened in Austin and its sales into China which had helped boost revenue.
She said the share price of Tesla was unlikely to surge off the back of the result given it was largely in line with analyst expectations.
But she said there could be an uplift in the sentiment around the stock.
Lunman said Covid-19 had meant New Zealand investors were now more easily able to jump online to see live result and meeting presentations.
“Because of Covid all of those things are online so it’s far more accessible. It’s no longer an in-person thing.
“People are wanting to become more active shareholders particularly in light of Gamestop they see that their voice matters.”
She said Kiwi investors were also in the process of putting forward questions to be answered by the like of US companies Palantir and Lemonade at their results briefings.
Lunman described 2020 as the year of internet, saying that consumers were looking for ways to spend money online across various platforms.
This includes online investing, but it’s also been evident in strategic moves made by companies like Nike in increasing its direct-to-consumer approach through its websites around the world.
– Additionalreporting from Associated Press
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