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Tesla (TSLA) and IBM (IBM) Mixed in Q1, ZION Misses
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Market indices continue to hug the middle of the road this trading week, closing for the third straight session within a half a percentage point on either side of zero. In today’s case, these major indices were within a quarter-point of breakeven: the Dow lost -79 points, -0.23%, while the S&P came in at -0.01%. The Nasdaq reached +0.03% on the day and the small-cap Russell 2000 was +0.22%.
Perhaps market participants were waiting until Tesla (TSLA - Free Report) reported earnings after the bell? If so, their wait is over: Tesla beat earnings expectations by a penny to 85 cents per share over the Zacks consensus. Revenues, on the other hand, were shy of consensus estimates: $23.33 billion was reported for Q1, below the expected +23.47 billion. That said, Tesla quarterly sales were still more than +20% higher year over year.
With the company notably having cut prices on some of its key models (on key competition from other car manufacturers beginning to hit the market with their own EVs), analysts were taking a good look at Gross Margins for the quarter, and here they came in below expectations: +18.3% versus the +20.5% anticipated (subtracting government credits for EV purchases), with Operating Margins at +11.4% Operating Cash Flow at $2.5 billion. Its Energy business was way up in the quarter, though everyone knows Tesla’s main business is in EVs.
The question for Tesla going forward is not whether they can take out consensus earnings estimates quarter over quarter — clearly they have, with this being the ninth-straight quarter of a positive earnings surprise. The question is whether we have seen the bottom in gross margins for this cycle, or whether further price cuts will take this +18.3% figure down further — and if so, how much farther? Tesla is still far and away the global EV leader, but price cutting may suggest that Tesla autos are not quite as in-demand as CEO Elon Musk continues to suggest.
IBM (IBM - Free Report) also reported Q1 earnings after today’s close, with earnings of $1.36 per share beating the Zacks consensus by +8% on revenues of $14.25 billion, which is slightly less than the $14.27 billion expected. Consulting and Software revenues grew +2.8% and +2.6%, respectively, while RedHat business growth was +8% in the quarter. The company now expects full-year revenues to come in +3-5% on a constant currency basis.
Salt Lake City-based regional bank Zions Bancorp (ZION - Free Report) also released Q1 results this afternoon, missing on both top and bottom lines: earnings of $1.33 per share was notably below the $1.51 expected, on $839 million in revenues, which missed the Zacks consensus $844 million. Net Interest Income (NII), a key metric for regional banks, reached $679 million versus the $687.5 million analysts were looking for. Loss provisional deposits came in -3.4% for the quarter. Questions or comments about this article and/or its author? Click here>>
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Tesla (TSLA) and IBM (IBM) Mixed in Q1, ZION Misses
Market indices continue to hug the middle of the road this trading week, closing for the third straight session within a half a percentage point on either side of zero. In today’s case, these major indices were within a quarter-point of breakeven: the Dow lost -79 points, -0.23%, while the S&P came in at -0.01%. The Nasdaq reached +0.03% on the day and the small-cap Russell 2000 was +0.22%.
Perhaps market participants were waiting until Tesla (TSLA - Free Report) reported earnings after the bell? If so, their wait is over: Tesla beat earnings expectations by a penny to 85 cents per share over the Zacks consensus. Revenues, on the other hand, were shy of consensus estimates: $23.33 billion was reported for Q1, below the expected +23.47 billion. That said, Tesla quarterly sales were still more than +20% higher year over year.
With the company notably having cut prices on some of its key models (on key competition from other car manufacturers beginning to hit the market with their own EVs), analysts were taking a good look at Gross Margins for the quarter, and here they came in below expectations: +18.3% versus the +20.5% anticipated (subtracting government credits for EV purchases), with Operating Margins at +11.4% Operating Cash Flow at $2.5 billion. Its Energy business was way up in the quarter, though everyone knows Tesla’s main business is in EVs.
The question for Tesla going forward is not whether they can take out consensus earnings estimates quarter over quarter — clearly they have, with this being the ninth-straight quarter of a positive earnings surprise. The question is whether we have seen the bottom in gross margins for this cycle, or whether further price cuts will take this +18.3% figure down further — and if so, how much farther? Tesla is still far and away the global EV leader, but price cutting may suggest that Tesla autos are not quite as in-demand as CEO Elon Musk continues to suggest.
IBM (IBM - Free Report) also reported Q1 earnings after today’s close, with earnings of $1.36 per share beating the Zacks consensus by +8% on revenues of $14.25 billion, which is slightly less than the $14.27 billion expected. Consulting and Software revenues grew +2.8% and +2.6%, respectively, while RedHat business growth was +8% in the quarter. The company now expects full-year revenues to come in +3-5% on a constant currency basis.
Salt Lake City-based regional bank Zions Bancorp (ZION - Free Report) also released Q1 results this afternoon, missing on both top and bottom lines: earnings of $1.33 per share was notably below the $1.51 expected, on $839 million in revenues, which missed the Zacks consensus $844 million. Net Interest Income (NII), a key metric for regional banks, reached $679 million versus the $687.5 million analysts were looking for. Loss provisional deposits came in -3.4% for the quarter.
Questions or comments about this article and/or its author? Click here>>