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What’s happening: Shares of Tesla rose sharply on Thursday, after the company released its third-quarter results.
What happened: The EV maker reported better-than-expected earnings for the latest quarter.
The spike in Tesla’s shares added more than $100 billion to its market capitalisation during the session.
How were the results: The Austin, Texas-based company reported single-digit growth in sales for the July to September quarter.
Why it matters: Tesla began offering attractive financing options to boost customer demand for its vehicles, after having cut prices last year. The company delivered 1.29 million vehicles during the first nine months of this year.
The company’s automotive revenues gained 2% year-over-year to $20 billion in the third quarter. Although Tesla achieved vehicle delivery growth in the quarter, the revenues were impacted by the decline in average selling price.
Deliveries rose 6.4% year-over-year to 462,890 units, while production ramped up by 9.1% to 469,796 units in the third quarter. The cost of goods sold per vehicle fell to a record low of approximately $35,100.
Tesla’s profit margin from vehicle sales, excluding regulatory credits, climbed to 17.05%, from 14.6% in the previous quarter. The margin came in significantly better than market estimates of 14.9%.
Cybertruck, which was launched last year, generated a profit for the first time.
The company closed the quarter with 6,706 Tesla Supercharger stations, representing a 20% year-over-year increase. It had $33.6 billion in cash and cash equivalents at the end of the quarter.
“No EV company is even profitable. And to the best of my knowledge, there was no EV division of any company, of any existing auto company that is profitable. So, it is notable that Tesla is profitable despite a very challenging automotive environment,” CEO Elon Musk said.
Musk also projected growth in vehicle sales of 20%-30% next year, versus analyst expectations of around 15%.
How shares responded: Tesla’s shares jumped 21.9% to close at $260.48 on Thursday, following the release of quarterly results. The stock has added around 61% over the past six months.
What to watch: Investors will continue monitoring Tesla’s vehicle sales, cost saving measures, and growth in the company’s expanding energy. New vehicle launches, including a cheaper version of the Model Y will also remain in focus.
Context: The CAD/USD forex pair declined to an 11-week low on Thursday amid weakness in crude oil prices.
Details: Since June this year, the Bank of Canada has lowered its benchmark interest rate by 125 basis points (bps) to 3.75%. The central bank announced a rate cut of 50 bps on Wednesday. Markets expect the BoC to slash rates by another 100 bps by September next year.
Lower prices of crude oil, one of Canada’s major exports, weighed on the loonie. WTI crude oil prices fell around 0.8% to close at $70.19 per barrel on Thursday.
Weakness in the US dollar limited the overall losses for the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.4% to 104.06 on Thursday.
The CAD/USD forex pair shed more than 0.1% to reach 1.3856 on Thursday, after falling to its lowest level since August 5 during the session. The S&P/TSX Composite Index fell slightly by 0.09% to close at 24,551.55.
What to watch: Investors await the release of economic data on new housing price index, retail sales and manufacturing sales from Canada today. New home prices in Canada, which remained unchanged in August, are expected to rise by 0.2% in September.
Analysts expect retail sales to grow by 0.5% in August, following a 0.9% gain in July. Manufacturing sales in Canada, which fell 1.3% in August, are projected to rise by 0.4% in September.
Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.13%, 0.34%, 0.08% and 0.03%, respectively.
The US has finalised $20 billion of its proposed $50 billion loan to Ukraine, which is backed by Russia’s frozen assets. The news sent the RUB/USD pair slightly lower in forex trading this morning.
Singapore’s private home prices declined by 0.7% in the third quarter, versus a preliminary reading of a 1.1% decline, which lent support to the SGD/USD forex pair.
UK’s GfK Consumer Confidence indicator edged lower to -21 in October, from -20 in the previous month. The region’s consumer confidence falling to the lowest level this year sent the GBP/USD pair lower in forex trading this morning.
New Zealand’s ANZ Roy Morgan consumer confidence index fell to 91.2 in October, from 95.1 in the previous month, exerting pressure on the NZD/USD forex pair.
Argentina’s retail sales jumped 204.4% year-over-year in August, which sent the ARS/USD pair higher in forex trading this morning.
France’s consumer confidence indicator, initial jobless claims and number of people registered as out of work, Spain’s unemployment rate and producer prices, Turkey’s manufacturing confidence index and capacity utilization, Eurozone’s inflation expectations over the next 12 months, loans to non-financial corporations, bank lending to households and money supply M3, Germany’s Ifo Business climate indicator, Ifo expectations, manufacturing confidence index and consumer confidence index, Brazil’s FGV consumer confidence, Canada’s CFIB business barometer and government budget value, US durable goods orders, University of Michigan consumer sentiment, Baker Hughes crude oil rigs and Baker Hughes total rigs, as well as China’s foreign direct investment.
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