Volkswacht Bodensee - Tesla reports jump in Q3 profits, but revenues miss estimates

The electric vehicle (EV) maker scored a more than doubling of profits in the third-quarter to $3.3 billion on increased auto deliveries

But shares retreated in after-hours trading after the company reported revenues of $21.5 billion, a 56 percent increase over the year-ago period, but about $500 million below analyst forecasts.

The company's press release flagged battery supply chain bottlenecks as a constraint on EV growth and noted logistics volatility remained an "immediate" but "improving" challenge.

"We remain focused on increasing vehicle production as quickly as possible," Tesla said in its news release.

The results follow Tesla's disclosure earlier this month that deliveries and production grew solidly in the third quarter after diving in the prior period due to a coronavirus-related factory closure at the company's Shanghai plant.

Heading into Wednesday's results, market analysts pointed to doubts about Tesla's ability to meet delivery expectations for 2022.

The automaker has avoided setting specific annual delivery targets, but analysts have benchmarked a target of about 1.4 million for all of 2022. Those forecasts are based on Tesla's language that it expects about 50 percent annual growth in deliveries -- language that was reiterated in Wednesday's press release.

Whether or not Tesla attains that level, Tesla watchers are expecting a strong fourth quarter with a restored Shanghai factory and the ramp-up of plants in Texas and Germany.

"We are expecting a significant jump in production and sales in the fourth quarter," CFRA Research analyst Garrett Nelson said ahead of the report.

- Immune to inflation? -

But Covid-19 remains a wildcard in light of China's continued adherence to its zero-tolerance approach to fighting the virus.

Another question concerns whether Musk's company will continue to remain immune to macroeconomic concerns, especially inflation.

The cheapest version, the Tesla Model 3, currently lists for about $48,500. On Tesla's July conference call, Musk said the company was struggling to build quickly enough to meet demand.

But with US inflation showing no signs of easing, analysts wonder whether demand for the pricey vehicles will remain robust.

Shares of Tesla have dropped more than 16 percent since Sept. 30, shortly before the company released its third-quarter delivery figures and ahead of Musk's October 4 revival of his bid to acquire Twitter and head off a trial in which he was being sued by the company for breach-of-contract.

In the most recent move in the ongoing takeover saga, a Delaware judge suspended litigation between the parties to allow more to finalize the $44 billion transaction.

But the judge has said that if the deal does not close by October 28, the trial could be rescheduled for November.

Some analysts see the drop in Tesla shares -- during a period that saw the S&P 500 advance -- reflects worries that Musk will sell more Tesla shares to finance the purchase of the social media company.

Tesla shares were down 3.4 percent to $214.40 in after-hours trading

C.Meier--BTB