Tesla posted a sharp drop in second-quarter earnings on Wednesday even as revenue topped analyst expectations, driving shares lower in after-hours trading.
The electric-vehicle maker reported adjusted earnings of 33 cents per share, well below the 51 cents Wall Street had projected. Revenue rose roughly 26 percent to $28.2 billion, surpassing consensus estimates of about $25.7 billion, buoyed by a 23 percent increase in automotive sales to $20.5 billion. Profitability, however, deteriorated sharply: operating margin slumped to 1.4 percent from 4.1 percent a year earlier, and free cash flow turned negative at $1.1 billion as capital expenditure surged 142 percent to $5.8 billion. Tesla shares fell more than 2 percent after the disclosure.
On the operational front, subscriptions to Tesla's Full Self-Driving software climbed 56 percent to 1.48 million, and the company's Robotaxi service expanded to Tampa and Orlando with roughly 50 vehicles still running in Austin. The results follow SpaceX's record-breaking stock market debut in June.