Tesla beats Q3 estimates as Musk floats SpaceX merger idea
Tesla reported third-quarter revenue and earnings above Wall Street projections while CEO Elon Musk declined to expand on a floated SpaceX merger.
The story in focus
Tesla reported third-quarter revenue of $28.05bn and earnings per share of $0.48, beating analyst projections of $27.9bn and $0.43. On the same day's earnings call, CEO Elon Musk declined to elaborate on a potential SpaceX merger he had floated a day earlier, saying nothing had been agreed.
- Tesla posted Q3 revenue of $28.05bn on $0.48 earnings per share, against projections of $27.9bn and $0.43.
- Musk said special committees at both companies are exploring a merger, with no terms agreed and a 50% Tesla shareholder approval threshold required.
- Automotive revenue fell 3% year over year, and Tesla's share price has declined more than 11% this year.
Earnings results
Tesla reported third-quarter revenue of $28.05bn and earnings per share of $0.48, according to its results released Wednesday. Wall Street had projected $27.9bn in revenue and $0.43 per share.
Revenue was slightly below the prior quarter's $28.23bn. Automotive revenue fell 3% from a year earlier, and the company's share price has dropped more than 11% this year amid competition from cheaper Chinese automakers.
Merger proposal remains unapproved
Musk said on Tuesday that merging Tesla with SpaceX, his rocket and AI company, would be a good idea and that special committees had been formed at both boards to assess a deal. He stressed nothing had been agreed, and any transaction would require approval from 50% of all Tesla shareholders, a threshold he called a high hurdle.
On Wednesday's earnings call, Musk said he had said everything on the subject and did not take questions. A Tesla shareholder vote has not been held, and no terms have been disclosed.
Product bets and analyst caution
Tesla has shifted emphasis toward robotics, autonomous driving and AI. Forrester analyst Paul Miller said Tesla robotaxis are carrying passengers but not at the levels the company promised. Musk reiterated that he expects Optimus humanoid robots to become the biggest product on earth.
Did Tesla's earnings beat settle whether a SpaceX merger will happen?
No. The Q3 results beat analyst projections, but the merger remains only a floated idea. Musk said special committees are exploring it, no terms have been agreed, and approval from 50% of Tesla shareholders would be required.
Sources & further reading
- Tesla beats earnings projections after Musk floats SpaceX merger plan ↗The Guardian
- Why is Elon Musk plotting a mega-merger of SpaceX and Tesla? ↗BBC News
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