Tesla said Wednesday that its profits fell last quarter as the car company run by Elon Musk shoveled more money into research and development, cutting into profits from a sharp increase in vehicle sales.
The Austin, Texas, company reported second-quarter net income of $1.11 billion, or 32 cents per share. That is compared to earnings of $1.17 billion, or 33 cents per share, in the same quarter last year.
Excluding certain charges, earnings were 33 cents
per share, down from 40 cents per share in the prior-year quarter. That fell short of the 53 cents per share forecast by Wall Street analysts, according to FactSet.
Revenue rose 26% to $28.24 billion, beating analysts’ forecast of $26.42 billion.
Spending on research and development surged about 49% from a year earlier to $2.37 billion.
Tesla shares fell 2.7% to $363.98 in after-hours trading shortly after it released its latest results. The stock ended the regular trading session 1.3% lower and is down just under 17% this year.
Earlier this month, Tesla reported that it delivered 480,216 cars in the second quarter, a 25% increase from the same period last year and its second straight quarterly gain. The sales also exceeded analysts’ expectations, according to a FactSet survey.
Tesla’s improving sales this year mark a big turnaround from a year ago, when many Europeans refused to buy the company’s cars because of Musk’s embrace of far-right political candidates in elections there.
