$Tesla(TSLA.US)Tesla shares dropped sharply following a disappointing second-quarter earnings report, which missed profit expectations, showed negative free cash flow, and highlighted massive spending increases on artificial intelligence and robotics.
Earnings and Profit Miss
Lower profit per share: Reported adjusted earnings of $0.33 per share vs. $0.51 to $0.54 expected by Wall Street.
Shrinking margins:
Automotive gross margins compressed due to vehicle price cuts and lower regulatory credit revenue.
Profit decline:
Total net income fell roughly 5% year-over-year.
Heavy Cash Burn and SpendingSurging capital expenditures:
Capital expenses more than doubled to $5.79 billion for the quarter.
Negative free cash flow:
The company burned through over $1.1 billion during the quarter.
Aggressive future guidance:
Executives stated that full-year spending will exceed $25 billion to fund robotaxis, AI infrastructure, and the Optimus humanoid robot.
Investor Concerns Over TimelineDelayed payoff: Investors grew worried about the slow rollout and heavy costs of Elon Musk’s long-promised robotaxi and robotics projects.
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