Tesla shares extended losses to 12%, with the stock quoted at $329.015 and the company’s market capitalization at $1.24 trillion, according to MSX.COM data cited by Odaily. The selloff came after Tesla’s second-quarter results showed a mixed picture: revenue reached $28.24 billion, beating market expectations and rising 26% year over year, the first time in three years that quarterly revenue growth topped 20%.
The stronger top-line figure was overshadowed by weaker profitability. Operating profit came in at just $398 million, well below the market’s expected $1.39 billion. Adjusted earnings per share were $0.33, down 18% from a year earlier and also far short of expectations. Gross margin fell to 16.8%, compared with analysts’ forecast of 19.4%, and below the overall gross margin of 21.1% in the first quarter.
Tesla also reported free cash flow of negative $1.09 billion in the second quarter, marking its first negative quarterly reading since the first quarter of 2024. Company executives said the reversal was caused by capital expenditures more than doubling from the prior quarter. They added that capital spending is expected to keep rising over the next two to three years and reiterated that full-year capital expenditures will exceed $25 billion.
Tesla shares fell as much as 12% to $329.015, bringing the company’s market capitalization to $1.24 trillion, according to MSX.COM data cited by Odaily.
Revenue beat estimates, but profit missed badly
Tesla reported second-quarter revenue of $28.24 billion, ahead of market expectations and up 26% from a year earlier. Odaily said it was the first time in three years that the company’s year-over-year revenue growth exceeded 20%.
Still, the rest of the earnings report was much weaker. Operating profit came in at only $398 million, far below the market forecast of $1.39 billion. Adjusted earnings per share were $0.33, down 18% year over year and also well short of expectations.
Gross margin declined and free cash flow turned negative
Tesla’s gross margin was 16.8% in the second quarter, below analysts’ expectation of 19.4%. In the first quarter, overall gross margin was 21.1%.
The company also posted free cash flow of negative $1.09 billion in the second quarter. That was Tesla’s first negative quarterly free cash flow since the first quarter of 2024.
Executives pointed to higher capital spending
Tesla executives said the negative free cash flow was caused by capital expenditures, which more than doubled from the first quarter. They said capital spending is expected to continue rising over the next two to three years and reiterated that full-year capital expenditures will exceed $25 billion.
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