Tesla Income Up 20% But Share Value Sags Quickly

Elon Musk’s big bet that Tesla price cuts could boost sales and profits amid increasing competition and poor economic sentiment appears to be yielding mixed results.

Photo Insert: Tesla just recently completed building its first unit of the long-delayed Cybertruck.

Sales jumped and the company beat analyst expectations for net income in the April-June quarter, although the company’s profit margins declined. Tesla shares followed suit in after-hours trading.

The Austin, Texas, maker of electric vehicles, solar panels and batteries reported net income of $2.7 billion in the quarter, a 20% increase from a year ago.

Earnings per share also rose 20% to 78 cents when measured via generally accepted accounting principles. Total revenue rose 47% to $24.93 billion, David Hamilton reported for the Associated Press (AP).

Tesla’s operating margin, which represents how efficiently sales are turned into pretax profits, fell to 9.6% in the April-June quarter, down significantly from 14.6% a year earlier.

The measure had also declined sharply in the January-March quarter.

Tesla shares initially stayed flat at roughly $292 in after-hours trading following the earnings report, up a smidgen from their close at $291.26. As Tesla executives spoke to analysts in a conference call, shares slipped more than 4%.

Tesla reported strong vehicle delivery numbers on July 2, saying they rose 83% compared to the year-earlier quarter after the company cut prices several times on its four electric vehicle models.

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