Coffee With Greta: Tesla Drops
DJIA Futures: -182 (-0.5%)
SPX Futures: -31 (-0.7%)
NASDAQ Futures: -121 (-0.9%)
Good morning friends!
Futures are dropping as traders digest the latest Q1 earnings reports.
Let’s get right to it!
Tesla Drops As Profits, Margins Decline
Tesla (TSLA) shares are tumbling 8.3% ahead of the open despite reporting Q1 results that were mostly in line with expectations.
Here’s how the electric automaker’s results compared to analysts’ estimates:
- Adjusted EPS: $0.85 as expected
- Revenue: $23.33 billion vs $23.21 billion expected
Net income tumbled 24% year over year while total revenue rose 24%.
Tesla said “underutilization of new factories” stressed its margins during the quarter.
Ebitda profit margins dropped to 18.3% in Q1 from 27% a year ago while operating margins fell to 11%.
The Q1 results came after Tesla cut its vehicle prices for the sixth time this year earlier on Wednesday.
The company said it expects “ongoing cost reduction of our vehicles, including improved production efficiency at our newest factories and lower logistics costs, and remain focused on operating leverage as we scale.”
It said pricing will continue to “evolve upwards or downwards, depending on a number of factors.”
IBM Earnings
IBM (IBM) shares are up 1.2% in premarket trade after beating Q1 profit expectations.
Here’s how the company’s results compared to analysts’ estimates:
- Adjusted EPS: $1.36 vs $1.26 expected
- Revenue: $14.25 billion vs $14.35 billion expected
Net income jumped 26% year over year while revenue increased 0.4%.
IBM’s total expenses and other income declined 4% as the company took steps to operate more efficiently.
The company said it expects 3% to 5% revenue growth this year and maintained its guidance for $10.5 billion in 2023 free cash flow.
Philly Fed Manufacturing Index Contracts Further
A key manufacturing gauge slipped further into contraction in April.
The Philadelphia Fed’s manufacturing index fell by 8.1 points to negative 31.3 this month.
That was the eight straight negative reading and worse than expectations for the index to improve to negative 20.
Any reading below zero signals contraction in business activity in the manufacturing sector.
Weekly Jobless Claims Rise
Weekly jobless claims rose more than expected last week in a sign of rising layoffs.
The Labor Department reported 245,000 Americans filed initial unemployment claims, up by 5,000 from the previous week.
That was higher than expectations for 244,000.
Continuing claims rose by 61,000 to 1.87 million in the week ending April 8, the highest level since November 2021.
Coming Up: Existing Home Sales
The National Association of Realtors reports existing home sales for March at 10:00 a.m. ET.
That report is expected to show the pace of sales slowed to a seasonally adjusted annual rate of 4.48 million units from 4.58 million in February.
The housing market has remained under pressure in 2023 due to high mortgage rates, low supply, and high prices.
In Case You Missed It
- Meta Platforms (META) started its latest round of job cuts on Wednesday. The company started laying off employees in technical roles after announcing the cuts in March. The cuts are part of a plan to lay off 10,000 workers this year in addition to the 11,000 announced back in November. Meta is expected to incur $3 billion to $5 billion in restructuring costs related to the layoffs.