Tesla reported third-quarter earnings after the bell, and executives addressed a broad vary of questions through the earnings name, together with macroeconomic considerations and CEO Elon Musk’s pending takeover of Twitter.

Shares fell by about 5% after hours following the outcomes.

Listed below are the outcomes.

• Earnings: $1.05 vs 99 cents per share (adjusted) anticipated, primarily based on analysts polled by Refinitiv
• Income: $21.45 billion vs $21.96 billion anticipated, per Refinitiv.

Tesla’s internet earnings (GAAP) for Q3 2022 reached $3.33 billion, with automotive gross margins holding regular at 27.9%, precisely the place it stood within the second quarter of 2022. Throughout the identical interval final yr, Tesla reported $1.62 billion in income.

On an earnings name on Wednesday to debate the outcomes, Musk answered shareholder questions on electrical car demand and a attainable share buyback.

“I am unable to emphasize sufficient we’ve got wonderful demand for This fall and we anticipate to promote each automotive that we make for as far into the long run as we are able to see,” Musk mentioned. “The factories are working at full velocity and we’re delivering each automotive we make, and conserving working margins sturdy.”

Tesla is prone to do a “significant buyback” subsequent yr, he added, doubtlessly between $5 billion and $10 billion pending board approval.

He additionally mentioned, optimistically, “I am of the opinion that we are able to far exceed Apple‘s present market cap. The truth is I see a possible path for Tesla to be value greater than Apple and Saudi Aramco mixed. That does not imply it is going to occur or shall be straightforward.”

Shareholders requested Tesla executives about macroeconomic points impacting their enterprise in and past China.

“China is experiencing a recession of kinds” largely within the property markets, Musk mentioned, “and Europe has a recession of kinds pushed by power.” He added, “North America’s in fairly good well being, though the Fed is elevating rates of interest greater than they need to, however I believe they’re going to finally notice that and convey them down once more.”

In response to a special query, Musk additionally talked about his pending acquisition of Twitter, saying “I believe it is an asset that has kind of languished for a very long time however has unbelievable potential.” He later added, “The long-term potential for Twitter is an order of magnitude higher than its present worth.”

Musk is predicted to promote a portion of his appreciable shares in Tesla to assist finance the shut of that $44 billion take personal deal.

Tesla’s automotive income got here in at $18.69 billion, a rise of 55% from a yr in the past. Price of income for the corporate’s core automotive enterprise rose to $13.48 billion through the quarter, up from $10.52 billion through the second quarter, consistent with the rise in automotive gross sales. Tesla’s automotive regulatory credit made up 1.5% of automotive revenues at $286 million for the quarter.

Tesla reiterated earlier steering in its shareholder deck on Wednesday, saying: “Over a multi-year horizon, we anticipate to attain 50% annual development in car deliveries.”

The corporate reiterated that deliveries of its Semi electrical heavy obligation truck will start in December, and confirmed that it’s producing the Semi in Nevada, the place it produces battery packs for its automobiles within the US. The Semi was first introduced in Dec. 2017.

Tesla provided no agency timeline for the beginning of manufacturing of its Cybertruck pickup, saying solely that it could be produced in Texas after the ramp-up of Mannequin Y manufacturing there.

The corporate beforehand reported that its deliveries for the quarter ending September 30 reached 343,000 and car manufacturing reached 365,000. Deliveries are the closest approximation of gross sales reported by Tesla. Shares have dipped greater than 17% since that weekend report on October 2.

Whereas car manufacturing and deliveries have grown, service has not saved tempo and has been a sore spot for a lot of Tesla house owners.

CEO Elon Musk mentioned, in July, that he was, “Excited to work with Tesla Service to allow same-hour service as usually as attainable! Making use of Method 1 pit crew strategies to Teslas.”

However Tesla elevated its retailer and repair heart places by simply 6% within the third quarter, including 41 new places versus the second quarter of 2022. It added extra cellular service automobiles to its fleet, nonetheless, which service technicians use to drive to repair clients’ vehicles on-site when attainable. As of the top of the third quarter, Tesla mentioned it was working 728 retailer and repair places, with a fleet of 1,532 cellular service automobiles.

Providers and different income, which incorporates charges for purchasers powering up their vehicles at Tesla Supercharging stations, gross sales of Tesla-branded merchandise, and repairs for purchasers’ vehicles out of guarantee, rose to $1.65 billion.

In its Q3 earnings launch, the corporate warned a couple of bottleneck in transportation capability for delivering new vehicles within the closing weeks of the quarter, and mentioned it was “transitioning to a smoother supply tempo.”

Tesla’s power unit generated $1.12 billion in income for the quarter. This division sells backup batteries for residential, business and utility use, and installs photo voltaic rooftops.

Vitality income development got here largely from gross sales of power storage techniques. The corporate mentioned it put in power storage techniques with a capability of two,100 megawatt-hours (or 2.1 gigawatt hours) through the quarter and famous, “Demand for our storage merchandise stays in extra of our skill to produce.”

Tesla’s power division competes for battery cell provide with its automotive division and versus different electrical car makers. Tesla wrote, in its shareholder deck, “We proceed to consider that battery provide chain constraints would be the major limiting issue to EV market development within the medium and lengthy phrases.”