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Tesla Inc (NASDAQ: TSLA) has reduced US prices of its Model Y and Model 3 cars following third-quarter delivery figures that did not meet expectations.
According to the company’s website, the starting price for the Model 3 is $38,990, lower than the previous $40,240 listing. The long-range version dropped from $45,990 to $47,240, while the Model 3 was reduced from $53,240 to $50,990. Tesla also reduced its Model Y sports utility vehicle (SUV) from $54,490 to $52,490.
On Monday, Tesla published a report for the third quarter of 2023, highlighting production and delivery figures. For Models 3 and Y, Tesla said it produced 416,800 in the quarter and delivered 419,074. Overall, Tesla manufactured a total of 430,488 electric vehicles and delivered 435,059. Unfortunately, these deliveries did not meet Wall Street expectations. Analysts surveyed by StreetAccount had put deliveries at 461,640.
In the vehicle production and deliveries report, Tesla said the volume decline was due to “planned downtimes for factory upgrades.” However, the company said its 1.8 million target for total deliveries in 2023 remains unchanged. During the company’s July earnings call, CEO Elon Musk predicted a production decline because of factory upgrades. At the time, he also reiterated the target for total deliveries in 2023.
Tesla categorizes deliveries into Model 3 and Y, and Model S and X vehicles. The company announces figures for each category but does not report numbers for individual models. Also, the company does not publicize figures for deliveries by region.
Since the end of 2022, Tesla began reducing car prices across multiple regions to maintain demand. The company hopes price reductions will help attract more buyers as consumer spending decreases and EV competition increases.
Last month, Turkish President Recep Tayyip Erdogan invited Elon Musk to consider setting up a Tesla factory in the country. The pair met in New York, where Erdogan was attending the United Nations General Assembly.
According to reports, Erdogan and Musk spoke at the Turkish House in Manhattan, where the President noted the success of Turkey’s Togg EV maker. Erdogan reportedly told Musk that Tesla would thrive considerably well in the region if Musk decided to put the company’s next factory in Turkey. In addition to the invitation, Erdogan suggested a collaboration between Musk’s space exploration company SpaceX, and Turkey’s space program. Furthermore, the Turkish President asked Musk to join Turkey’s aviation, aerospace, and technology festival Teknofest, which runs from late September to October.
Musk reportedly responded by stating an interest in the Turkish market. He also noted that the company was already working with Turkish suppliers and that Turkey is a strong consideration for the company’s next factory. The CEO had previously expressed an intention to choose the location of Tesla’s new factory by the end of 2023. A new factory in Turkey may be advantageous for the region and also spread production demands weighing on running factories.
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FedEx has hiked its 2023 earnings forecast as expenses have started reducing due to the cost-cutting initiative.
Transport company FedEx (NYSE: FDX) has increased its expectation for 2023 earnings following the benefits it recorded from its cost-cutting initiative. The company said the cost-cutting measure addressed the continued demand weakness across several units, including FedEx Express. The multinational transport company gained over 11% in extended trading after releasing impressive reports for its fiscal Q3 2023.
During the fiscal third quarter, revenue slightly missed the $22.74 billion expected at $22.17 billion. However, earnings surpassed analysts’ forecasts. Adjusted earnings per share were 3.41, $0.68 higher than expected at $22.74 billion. At the same time, the quarterly net income was $771 million, a drop from the $1.11 billion reported in the same period of the previous year. FedEx Corp. president and CEO Raj Subramaniam commented on the team for outstanding service delivery during peak times. He added that the employees also made significant improvements concerning the transformation initiatives. The CEO added, “we’ve continued to move with urgency to improve efficiency, and our cost actions are taking hold, driving an improved outlook for the current fiscal year.”
Announcing the Q3 2023 results, FedEx reiterated its expectations of cost reductions over the next couple of years. The company looks forward to realizing over $4 billion in cost reductions by the end of the fiscal year 2025. The boss noted:
“We’ve continued to move with urgency to improve efficiency, and our cost actions are taking hold, driving an improved outlook for the current fiscal year.”
Now, FedEx has hiked its 2023 earnings forecast as expenses have started reducing due to the cost-cutting initiative. For the fiscal year, it is looking forward to adjusted earnings per share to come in between $14.60 and $15.20. It formerly placed the full-year earnings per share between $13 and $14. On the other hand, Wall Street had expected $13.56 EPS.
The company announced a 10% layoff of workers last month as it embarks on a wide-sweeping plan to lower expenses amid weak demand. The CEO recently revealed that specific staffing-related costs had dropped by 8% YoY. During the earnings call, Subramanian said FedEx staff would expectedly drop about 25,000 YoY as 2023 earnings pop.
As part of its cost-cutting measures, the transport company plans on grounding planes, reducing flights, shutting down some office space, and making some adjustments to the Ground unit as per pick-up and delivery. On total enterprise cost, FedEx saved $1.2 billion year-over-year. In addition to lowering flight hours by 8%, it reduced expenses on salary and benefits by 4%. To achieve higher earnings in the full-year 2023, FedEx wants to ground more planes in Q4 and reduce flight hours. For the last quarter of the year, the company expects flight hours to go down by double digits.
FedEx is not only expecting remarkable earnings in 2023, the company also expects volume to increase in the current quarter. The company’ stock currently trades up 11.15% to $226.80 in premarket trading.
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With its impressive performance for both the fourth quarter and the full fiscal year, Grab has shared a positive projection for the current quarter and for 2023.
Singapore-based ride-hailing and food delivery service provider, Grab Holdings Ltd (NASDAQ: GRAB) has seen an uptick in its shares in the pre-market as it unveils a better-than-expected Q4 revenue. While the firm’s stock is currently pegged at $3.63 atop a 3.71% growth, it recorded an upsurge as high as 6% hours earlier.
The company, which has maintained dominance as the biggest food delivery company in Southeast Asia said its Q4 2022 revenue grew by a massive 310% year-over-year (YoY) to $502 million. As a complement to this growth, it said its 2022 fiscal year revenue shot up by 112% year-over-year to $1.433 billion.
Grab was one of the major beneficiaries of the COVID lockdowns, however, events in the broader global economy have seen it lose its grip over the past year. The company said its total loss for the fourth quarter was improved by 64% YoY to $391 million. The firm even recorded a better performance for the full year as the loss improved by 51% year-over-year to $1.740 billion.
“We achieved these results by focusing on capturing the rebound in Mobility demand, optimizing our costs, reducing our cost-to-serve, and innovating on products and services that drive stickiness and engagement within our ecosystem. As we look ahead, we will remain laser-focused on driving sustainable growth, and improving the efficiency of our ecosystem,” said Anthony Tan, Group Chief Executive Officer and Co-Founder of Grab.
The company also recorded significant milestones in its business for the period including a 14% growth in the number of monthly transacting users. The company has continued to face significant competition from key rivals including Indonesia’s GoTo Gojek Tokopedia PT Tbk (IDX: GOTO) which also attained profitability per its latest report.
With consumer spending notably slumping based on inflationary growth, competition for market share has been more daunting than before.
With its impressive performance for both the fourth quarter and the full fiscal year, Grab has shared a positive projection for the current quarter and for 2023. According to the company, it now expects its total revenue to range from $2.20 billion to $2.30 billion for the fiscal year. Should this figure be achieved, it will represent a massive 54% to 60% growth YoY.
The company also expected its breakeven point to fall into the fourth quarter of this year while its estimated timeline for the Adjusted EBITDA is pegged at the second half of next year. For a firm in a highly competitive market, Grab has shed off some programs that are cash intensive in order to relieve its operating costs.
The company is now reducing its overall promotions while progressing cautiously with respect to incentives for drivers. While these cost reduction measures might appear drastic, the firm posits they will help power more sustainable growth overall.
“This sets us up for a strong 2023 as we continue to focus on growing in a sustainable manner,” Chief Financial Officer Peter Oey said.
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Co-founder Reed Hastings is stepping down as the CEO.
Production company Netflix (NASDAQ: NFLX) saw a massive addition to its subscribers in Q4, exceeding Wall Street’s expectations. According to the fourth quarter financial results, the company gained 7.66 million paid subscribers, over the predicted 4.57 million. The significant additional Netflix subscribers in Q4 increased the company’s shares by 6%. At the time of writing, the company’s stock is up 7.12% in after-hours trading to $338.27. NFLX has popped more than 7% since the year started and gained 9.05% in the last three months. Over the past month, the company has increased by 7.06%.
Although Netflix surpassed analysts’ expectations in its quarterly subscribers, the company missed its earnings. Its earnings per share (EPS) came in at 12 cents, nearly X4 less than the 45 cents prediction. This is the first time Netflix’s latest tier is added to its earnings result, the ad-supported service. Tagged “Basic with Ads,” the new service rolled out in the US last year at $6.99 per month. Unlike all Netflix tiers, Basic with Ads subscribers are exposed to 15 to 30 seconds long commercials before and during their Netflix content.
Notably, Netflix did not specify the number of Basic with Ads users contributing to the new subscribers’ growth. However, the company explained that it saw significant engagement from both new and regular service users. There was no notable record of users dialing down from the premium service to the ads-included tier. Chief financial officer Spencer Neumann stated:
“We wouldn’t be getting into this business if it couldn’t be a meaningful portion of our business. We’re over $30 billion in revenue, almost $32 billion revenue, in 2022 and we wouldn’t get into a business like this if we didn’t believe it could be bigger than at least 10% of our revenue.”
At the same time, co-founder Reed Hastings is stepping down as the CEO for co-CEO Ted Sarandos and COO Greg Peters to take over. As Hastings exits his role, he will now become the company’s executive chairman. He acknowledged that the new co-CEOs have been able to help Netflix through challenging times within the business.
The company added in a statement:
“2022 was a tough year, with a bumpy start but a brighter finish. We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing and building our ads offering. As always, our north stars remain pleasing our members and building even greater profitability over time.”
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