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What’s happening: Shares of Tesla surged in after-hours trading on Tuesday, following the release of the company’s first-quarter results.
What happened: The EV giant reported weaker-than-expected sales and earnings for the lates quarter.
However, Tesla witnessed higher sales from one of its major businesses during the quarter.
How were the results: The Austin, Texas-based company reported a high single-digit decline in sales for the three months ended March.
Why it matters: Last week Tesla had announced plans to slash its global workforce by 10% amid lower sales.
Tesla said the decline in revenues in the first quarter was due to lower average selling prices as well as fewer vehicle deliveries. The company’s quarterly revenues declined for the first time since 2020, when the company’s production and deliveries were impacted by the pandemic.
Its average revenue per vehicle delivered declined around 5% year-over-year to $44,926 a vehicle in the quarter. Net profits fell sharply to $1.13 billion, from $2.51 billion in the year-ago quarter.
The company’s deliveries were 386,810 units, which missed market estimates of 449,080. Production was of 433,371 units in the quarter, falling short of expectations of 452,976. Both numbers fell on a year-over-year and sequential basis.
Automotive revenues declined 13% year-over-year $17.38 billion, while services and other revenues climbed 25% to $2.29 billion in the quarter.
“We recently undertook a cost-cutting exercise to increase operational efficiency. We also remain committed to company-wide cost reduction, including reducing COGS per vehicle,” the company said in a statement. “We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025,” the statement added.
How shares responded: Tesla’s shares recovered during the extended trading session, climbing 13.3% to $163.96. The stock had declined sharply ahead of the quarterly results and is down around 16% over the past month.
What to watch: Investors will watch the launch of new models from Tesla. Investors will also continue monitoring competition from other EV makers, including Ford.
Context: The GBP/USD forex pair moved higher on Wednesday, as investors assessed the latest economic data releases.
Details: Data released on Tuesday showed businesses in the UK had notched the fastest activity growth in almost a year, lending some support to the GBP/USD. The forex pair had declined to its weakest level in five months earlier in the week.
The S&P Global PMI Composite Index climbed to 54.0 in April, versus March’s reading of 52.8, recording the strongest growth in UK’s business activity since May 2023. UK’s services PMI surged to 54.9 in April, from 53.1 in the previous month, while the manufacturing PMI slipped to 48.7 in April, from 50.3 in March.
Public sector net borrowing, excluding public sector banks, contracted to £11.9 billion in March, from £16.6 billion in the year-ago period.
Some weakness in the US dollar also lent support to the GBP/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell 0.04% to 105.63 this morning.
The GBP/USD forex pair added 0.1% to settle at 1.2462 this morning, while the EUR/GBP rose 0.01% to 0.8597. London’s FTSE 100 gained 0.26% to close at 8,044.81 on Tuesday.
What to watch: Investors await the release of economic data on the CBI’s quarterly gauge of manufacturing optimism and industrial trends orders from the UK today. The CBI’s quarterly gauge of manufacturing optimism is expected to improve to a reading of 2 in the second quarter, while the Confederation of British Industry survey’s total order book balance is projected to rise to -16 in April, from March’s reading of -18.
Other Markets: US trading indices closed higher on Tuesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.69%, 1.20% and 1.51%, respectively.
The US is preparing a military aid package worth $1 billion to help Ukraine in its ongoing war with Russia. The news sent the safe-haven US dollar index slightly lower in forex trading this morning.
Australia’s inflation rate eased to 3.6% year-over-year in the first quarter, from 4.1% in the previous period, lending support to the AUD/USD forex pair.
New Zealand’s trade surplus contracted to $0.589 billion in March, from $1.602 billion in the year-ago month. However, exports climbing 3.5% year-over-year to $6.5 billion sent the NZD/USD pair higher in forex trading this morning.
South Korea’s Composite Consumer Sentiment Index came in steady at 100.7 points in April. This being the strongest level since August 2023 lent support to the KRW/USD forex pair.
Argentina’s economic activity estimator fell by 3.2% year-over-year in February, compared to a 4.3% decline in the earlier month, which sent the ARS/USD pair lower in forex trading this morning.
Saudi Arabia’s balance of trade, Turkey’s manufacturing confidence index and capacity utilization, Indonesia’s value of loans and Bank of Indonesia’s interest rate decision, Germany’s Ifo business climate index, Ifo current conditions indicator and Ifo expectations indicator, Italy’s manufacturing confidence index and consumer confidence index, Brazil’s FGV-IBRE consumer confidence index, US MBA mortgage applications, durable goods orders, crude oil inventories, gasoline stocks, and distillate inventories, Mexico’s mid-month inflation rate, Canada’s retail sales and manufacturing sales, Russia’s corporate profits and industrial production, as well as Argentina’s retail sales.
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