So why is Tesla stock dropping after reporting positive earnings? What's going on guys? It's Ricky here with tech. But Solutions and in this video, I'm going to be breaking down in the next four minutes exactly why Tesla Stock sold off after reporting positive earnings I'm going to start sharing my screen so you guys can see exactly what it is that I'm looking at as of right now after market hours. Tesla is down nearly four percent on the day. but why if it be its earnings per share and its overall Revenue Let's go ahead and jump right into it I Hope that you learned something new and if you do, please consider dropping a thumbs up and subscribing if you feel like we earned it.

So overall Tesla reported for Q2 Revenue 24.9 billion topping its Street estimate expectation of 24.5 billion. So again, Revenue was beat and so was earnings per share. The EPS came in at 91 cents per share with the expectation of 81 cents. That is all great.

But just like I explained to you in today's earlier video and in yesterday's video, there's two parts almost to almost I'm sorry there's two parts to every quarterly earning out there, and that is the actual report itself. But then also, there's a guidance call on earnings call where the executives get to come on the line and actually share future forecasts for the next quarterly earning and pretty much the future of the company. And in my opinion, those earning calls are often more valuable and more important to the actual price and value of that actual stock than the previous quarterly earnings that is being reported. And with that being said, it was what Elon Musk said that really created some form of kind of negative selling pressure.

Elon Musk also indicated that in Q3 that the Q3 production would be down slightly compared to the prior quarter. That was kind of the curveball that was thrown during this earnings call. That was not an expectation that a lot of people had. A lot of people always have very high expectations of Elon what are the two new products that Elon Musk is about to release? He didn't talk about that when it comes down to those Tesla cyber trucks.

They said that they should be able to start deliveries at the end of 2023, but we've heard all of that before. There is nothing fancy or are shiny in my opinion that was presented during this earnings call and or earnings report. The thing that is impressive is even during a potential recession, of course they delivered over 466 000 Vehicles which is the most vehicles that Tesla has ever delivered in a quarter now. Although that is great.

Again, the big concern was the overall net profits. Tesla has undergone a lot of different price cuts to incur Demand right? Demand was lower right, so they had to drop their prices. Therefore, if they dropped their prices on their vehicles, they make less money when it comes down to take home profits and that was something that we saw in this quarterly earning reports, which was one of the worst that we've seen in previous quarters. So with that being said, you guys can see right on over here that the overall expectation.

That says our operating margin remained healthy at approximately 10 percent, but if you look a little bit deeper, Tesla's operand margin fell below 10 to 9.6 which is nearly five percent less than what it was a year ago. Again, that was something that a lot of people already expected when it comes down to test net profits, because everyone understood that they did go under, undergo a lot of different price cuts and a lot of that demand was initiated from those tax rebates. That's great and all. but when it comes down to their take home and or net profits, it's unexpected for it to be the same, even if demand is higher.

Now, the only curveball that was really thrown that created a lot more selling pressure in my opinion is that curveball that he gave for future expectation of Tesla of Q3 and the production slowing down due to updates that are big that are gonna be underway in a lot of their different facilities. So other than that, that was my biggest takeaway. One of the things that you always have to take into consideration is that anytime that something is about to be reported, it's most likely already factored in. and if it doesn't come in as expected or better than expected, then it tends to react in a negative way.

and I think that's exactly what we're seeing as of right now. So if you guys have any other questions about what was released or reported today, I would love to be a valley for you. You can always send me a direct message free via Discord and that's the first link in the description down below. Also, don't forget I Do Trade Live every single morning and I will be hosting a lot of these different live sessions for free on our YouTube channel when it comes down to quarterly earning reports.

So make sure you subscribe. if you want to watch Me Trade Live as soon as tomorrow when the Market opens, that is going to be the second link in the description down below. And for those that are going to be asking what platform I'm using I'm using the Weeble trading application and it's the fifth Link in the description down below. I Appreciate your time and like always, let's make sure that we end the year on agreeing.

Now take it easy team.