Tesla and Microsoft September 2019 Earnings Both Beat Expectations

Tesla reported a return to profitability. Last week, we reported Tesla’s strong Q3 vehicle delivery numbers, and this week, the company reported its latest earnings. Tesla finally returned to profitability, posting a US $143 million profit (or 78 cents per share). This result is better than what analysts expected (but still 54% lower than the same quarter last year, which was a record quarter). As a result, the company’s share price surged more than 18% after the announcement.

Figure 1: Tesla’s Quarterly Net Income. After strong vehicle deliveries in Q3 2019, the company has returned to profitability

Microsoft delivered another stellar earnings report. The company reported a revenue of US $33.06 billion for the past quarter (Q1), beating analysts’ expectations. This translates to a per share revenue of $1.38 (a 21% increase compared to the same quarter last year). Nonetheless, some analysts are concerned that the growth of Microsoft’s cloud computing business is slowing down faster than expected. The cloud business grew 59% this quarter, lower than the 64% growth rate in the previous quarter.

Figure 2: Microsoft’s Quarterly Revenue. After Nadella became CEO in Q1 2014, the company has surged – largely powered by growth in the cloud business.

This article is meant to be informative and not to be taken as an investment advice, and may contain certain “forward-looking statements,” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, without limitation, estimates with respect to financial condition, market developments, and the success or lack of success of particular investments (and may include such words as “crash” or “collapse”). All are subject to various factors, including, without limitation, general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors that could cause actual results to differ materially from projected results.

Our team members at Vested may own investments in some of the aforementioned companies. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for an investor’s portfolio. Note that past performance is not indicative of future returns. Investing in the stock market carries risk; the value of your investment can go up, or down, returning less than your original investment. Tax laws are subject to change and may vary depending on your circumstances.

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