The Texas-based manufacturer of electric vehicles, batteries, and solar panels had reported a net income of $2.7 billion in this quarter, which is a solid 20 percent increase from last year.

Elon Musk’s massive bet that Tesla’s price cuts can amplify its sales and profits despite its increasing competition and a bad economic condition appears to be producing mixed results.

The sales of Tesla have taken a leap, and the company has beaten the expectations of analysts for the net income in the first quarter of the financial year; however, the profit margins of the company have declined.

Shares of Tesla in the after-hours trading followed suit.

The Texas-based manufacturer of electric vehicles, batteries, and solar panels had reported a net income of $2.7 billion in this quarter, a solid 20% increase from last year’s numbers.

Per share earnings also rose from 20% to 78% when calculated through generally accepted accounting standards. The total revenue increased 47% to $24.93 billion.

However, analysts have been focusing more on Tesla’s personal profit measurement, which omits the stock-based compensation expense. With that measure, the net income of Tesla zoomed to $3.15 billion, 91 cents per share, a sharp exceed of the analyst estimate of 80 cents per share, according to FactSet. Some analysts even expected a fall in profit due to the price cuts.

Shares of Tesla initially stayed flat at around $292 at the after-hour trading instantly following the earnings report, up by a small amount from their close at $291.26. While Tesla executives had a talk with analysts at a conference call, the shares declined more than 4%.

On July 2nd, Tesla reported solid vehicle delivery digits, climbing they increased 83% in comparison to the previous year’s early quarter after the company had cut prices multiple times on four of its models. Tesla sold a record number of 466,140 cars worldwide from April to June, which is almost double what it sold in the same quarter the previous year.

Additional Resources:

• Goldman Sachs Cuts Probability Of Us Recession In Next 12 Months
• UNSC Holds First Meeting On AI Threats, Officials Call For Regulations
• China’s Fiscal Revenue Growth Slows, Signaling Broadening Economic Pressure