Shares of Tesla Inc. (TSLA) were mixed despite record Electric Vehicle (EV) sales because rising costs took a huge bite out of the bottom line. Meanwhile, shares of International Business Machines Corp. (IBM) dropped after disappointing sales growth in its software unit, notes Amber Kanwar, host of the In the Money with Amber Kanwar podcast.
At TSLA, operating profit fell 40% in the quarter. The usual promises of robots and self-driving cars were not enough to offset the disappointment. CEO Elon Musk used the end of the conference call to urge shareholders to vote for his $1 trillion pay package that has been denounced by proxy advisory firms like ISS and Glass Lewis. The package only triggers once very ambitious measures are met, including valuation metrics.
At IBM, the unit that houses Red Hat showed slower growth than the previous quarter and grew less than analysts were expecting. IBM purchased Red Hat in 2018 for nearly $32 billion – and the open-source software company has been a key engine of growth for the company.
Those soggy results colored an otherwise strong quarter with overall sales and profit exceeding expectations. IBM's forecast for growth was increased for the year and its free cash flow estimates were also higher than Street expectations.
