Tesla forecasts slower growth in 2024

Tesla faces a setback with missed expectations, while Netflix surges on strong user growth

By Nadia Elbilassy | @Nadia Elbilassy | 25 January 2024

Market close
  • Netflix surged over 10% on strong user growth and revenue despite an earnings per share miss.

  • Market react positively to Netflix but remain cautious to Tesla's weaker outlook.

  • Tesla's Q4 results missed estimates, causing a 3% decline.

On the Market Watch!

Tesla Earnings

Tesla announced its fourth-quarter results, missing Wall Street expectations. The electric vehicle manufacturer also cautioned that annual production growth would be slower this year due to a weaker backdrop for electric vehicle demand.

Following the results' release, Tesla witnessed a 3% decline in afterhours trading on Wednesday.

The reported figures included an adjusted EPS of $0.71 on revenue amounting to $25.17 billion. Unfortunately, both figures fell short of Wall Street estimates, which predicted $0.73 in adjusted EPS and $25.61 billion in revenue.

Gross margins, a key financial metric, saw a decline to 17.6% in Q4, down from 23.8% in the same period the previous year. Factors contributing to this decrease included price reductions, rising operating expenses, and the expenses associated with the production of the long awaited Cybertruck.

Although deliveries included 484,507 cars in Q4 an increase from 435,059 in Q3. Inventories exerted pressure on margins and operating income.

Netflix earnings

Despite falling short on earnings per share, Netflix surged over 10% overnight as the company attracted a substantial 13.12 million new users in the three months ending on December 31. Marking a remarkable 71% increase compared to the same period in the previous year and surpasses analyst expectations, which were around 8.9 million new users.

The company's revenue demonstrated robust growth, increasing by approximately 12% year-on-year to reach $8.83 billion, surpassing projections and overshadowing a miss on earnings per share.

The streaming giant anticipates "healthy double-digit" annual top-line growth, leading to optimistic endorsements from Wall Street analysts. This upbeat forecast has fueled a more risk on sentiment in the market.