Tesla TSLA Q1 earnings decline year over year, missing expectations

Tesla disappoints with Q1 2024 results, missing earnings and revenue estimates. Caution on 2024 vehicle growth. Zacks Rank #5 (Strong Sell).

Tesla reported disappointing first-quarter 2024 results, falling short of both earnings and revenue estimates. This marks the third consecutive earnings miss for the electric vehicle giant, following a streak of 10 quarters of beating expectations. The company expressed caution about its vehicle volume growth rate for 2024, which is anticipated to be significantly lower than 2023.

In the first quarter, earnings per share (EPS) of 45 cents missed the Zacks Consensus Estimate of 46 cents and dropped from the previous year's figure of 85 cents. Total revenues of $21.3 billion also missed the consensus mark of $22.6 billion, showing a 9% decline year over year.

Tesla's first-quarter production reached 433,371 units (412,376 Model 3/Y and 20,995 other models), down 2% from the previous year and below the estimated 474,571 units. Deliveries totaled 386,810 vehicles, a 9% decrease from the previous year and below the estimated 439,292 units. The Model 3/Y saw deliveries of 369,783 vehicles, marking a 10% decline from the previous year.

Automotive revenues totaled $17.38 billion, down 13% year over year and below the estimated $20.87 billion. Automotive gross profit was $3.2 billion, with a gross margin of 18.5%, down from 21.1% in the first quarter of 2023. Operating margin declined to 5.5% and missed the forecast of 8.2%.

Energy Generation and Storage revenues were $1.64 billion, higher than the previous year but below the estimate. Energy storage deployments fell short of expectations at 4.05 GWh. Services and Other revenues increased 25% year over year.

Tesla's cash position stood at $26.86 billion as of March 31, 2024, compared to $29.1 billion at the end of 2023. Long-term debt increased to $2.899 billion. Net cash provided by operating activities was $242 million, with capital expenditure totaling $2.77 billion. Free cash flow was negative $2.53 billion.

Currently, Tesla carries a Zacks Rank #5 (Strong Sell). Other top players in the auto space include Geely Automobile Holdings Limited, Allison Transmission Holdings, Inc., and Volkswagen AG, each holding a Zacks Rank #1 (Strong Buy).

Geely is expected to see significant sales growth in 2024, with EPS estimates also on the rise. Allison Transmission and Volkswagen are also projected to see sales and earnings growth in the coming years. For more investment recommendations, download the 7 Best Stocks for the Next 30 Days from Zacks Investment Research.