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Tesla reported a decline in quarterly profits Wednesday despite significantly boosting vehicle deliveries and overall revenue. The electric automaker, headquartered in Austin, Texas, generated net income of $1.11 billion, or 32 cents per share, in the second quarter, marking a decrease from $1.17 billion, or 33 cents per share, in the same period one year prior.
The company’s earnings per share on an adjusted basis fell to 33 cents from 40 cents year-over-year, missing Wall Street’s consensus estimate of 53 cents per share according to FactSet data. However, Tesla’s top-line performance exceeded expectations, with revenue climbing 26 percent to $28.24 billion compared to analyst projections of $26.42 billion.
Tesla attributed the earnings pressure partly to a substantial increase in research and development expenditures, which surged approximately 49 percent to $2.37 billion from the prior year. The heightened investment strategy dampened profit margins despite the company’s stronger sales performance.
Stock markets reacted negatively to the results, with Tesla shares declining 2.7 percent to $363.98 in extended trading following the announcement. The company’s stock finished the regular session down 1.3 percent and has lost roughly 17 percent year-to-date.
Tesla reported second-quarter vehicle deliveries of 480,216 units earlier this month, representing a 25 percent increase from the same quarter last year and marking the company’s second consecutive quarterly sales gain. The delivery numbers surpassed analyst expectations tracked by FactSet surveys.
The sales improvement reflects a notable recovery for Tesla after a challenging 2023, when European consumers largely rejected the company’s vehicles amid backlash over Elon Musk’s public support for far-right political candidates in regional elections.
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