Yahoo Finance Trending tickers: Tesla | Deliveroo | Glencore | Jet2
Investor updates on some of the key stocks this Thursday
Tesla (TSLA)
Tesla stocks are slipping in after-hours trading after the electric-vehicle maker reported slight revenue and profit misses and a gross margin that dipped below 20% to 19.3% as the cost of recent price cuts hit profitability.
The company posted a revenue of 85 cents a share on $23.33bn total revenue, just below analysts’ prediction of 86 cents a share on $23.34bn.
Automotive revenue, Tesla’s core segment, reached $19.96bn in the quarter, up 18% from last year. Total revenue was up 24%. Revenue from automotive regulatory credits during the first three months of 2023 amounted to $521m, down from $679m in the first quarter last year.
Gross margins dropped from 29.1% to 19.3% year-over-year after the company rolled out a series of recent price cuts.
Tesla cut prices worldwide on its EVs including in the US where it recently cut prices for sixth time this year amid rising competition.
“Although we implemented price reductions on many vehicle models across regions in the first quarter, our operating margins reduced at a manageable rate,” the company said, adding that further cost cuts were likely.
Read more: FTSE 100 lower amid weak earnings reports
Russ Mould, investment director at AJ Bell, said: “With profit falling for the first time since 2019, Tesla is facing a race to reduce the costs of building its vehicles to support the mass-market appeal of its brand while also delivering the sort of returns expected by investors.
“The company is also taking the view that by building out an effective installed base of Tesla vehicles it is creating a larger pool from which to draw revenue from subscription services, parts and maintenance.
“While Tesla’s price cuts are raising eyebrows, it is a natural progression for the EV industry if it is truly to supplant combustion engines for price points to reach levels which are affordable for the average family.”
Looking ahead, Tesla said it still sees full-year production of 1.80 million, compared with analyst estimates for 1.84 million.
Deliveroo (ROO.L)
Orders at Deliveroo fell 9% in the first three months of 2023 as the cost of living pushed customers to save money by cutting back on meal deliveries.
The London-listed group said UK and Ireland order numbers fell 3% in the first three months of the year, although food price inflation helped results.
Customers placed 72.1 million orders in the first quarter, down from 78.8 million in the same period a year ago.
The food delivery company reported a 4% increase in revenue in the first quarter of its financial year, which it described as a “resilient performance”.
Gross transaction value (GTV) was down 1% year-on-year in the quarter. Deliveroo said that growth improved through the quarter, with revenue growth outpacing GTV growth.
Revenues grew 7% to £512m in the first three months of 2023, or 4% at constant currency rates.
Chief executive Will Shu said it was a "resilient performance", driven by the British and Irish markets, as the company maintained its guidance for the year for low to mid-single digit GTV growth and core earnings of £20m-£50m.
“Against this backdrop, I’m particularly pleased with our performance in UK and Ireland, reflecting a further improvement in our offering to consumers,” he added.
Giles Thorne, an analyst at Jefferies, said Deliveroo’s first-quarter performance “looks solid when compared with expectations and full-year guidance, and impressive when compared with Just Eat UK’s performance”.
Glencore (GLEN.L)
Glencore has ramped up pressure on Teck Resources as it continues a bid to take control of the Canadian miner.
Teck has repeatedly rejected Glencore's $22.5bn takeover offer and instead urged shareholders to vote for the company's own plan to split its coal and copper businesses.
In a letter to Teck shareholders, the FTSE 100 firm said it was ‘willing to consider’ upping a £18.5bn bid after it was rejected by management.
"We have sought to engage with your board regarding our proposal, but your board has consistently refused any engagement,’ Glencore wrote, adding it was willing to talk to shareholders directly if its advances were continually rebuffed, effectively threatening a hostile takeover.
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"We urge Teck shareholders to take action to ensure that the board engage in bona fide negotiations regarding Glencore’s proposal," said chief executive Gary Nagle.
The Swiss miner and trader made its all-share offer as Teck's own plan to spin off its metallurgical coal business and focus on copper and zinc nears an April 26 vote.
Jet2 (JET2.L)
Jet2 has improved its outlook for the year ahead as Britons race to book their summer holidays.
Britain's biggest tour operator said it now expects profit to come in between £387m and £392m, up 5% from the bottom end of its previous range.
The operator stated on sale seat capacity for summer 2023 was currently 7.2% higher year-on-year at 15.26m seats, while forward bookings to date were said to be "encouraging". In addition, average load factors for Summer 2023 were currently 0.7% ahead of 2022.
Jet2, which last year took 5.9 million passengers on holiday overtaking TUI to become Britain's biggest tour operator, said summer pricing remained strong and margins per passenger were encouraging.
Shares in Jet2, which has a market capitalisation of £2.8bn, have risen 39% in the year to date.
AJ Bell’s Mould said: “With Britons racing to book holidays it is a natural progression to see Jet2 upgrade its profit outlook.
“As evidenced by its market share gains in recent times, Jet2 is being rewarded for good customer service and for treating travellers with a measure of respect which was conspicuous by its absence at some other operators during the pandemic.
“It is good to see that being upfront with people is something which pays off. While Jet2 still faces turbulence as household budgets remain under pressure and fuel costs remain elevated, its management team’s careful stewardship of the company should put it in a good place for the longer term.”
Watch: Tesla signals more price cuts ahead as report warns of slump in demand for new electric cars
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