Tesla hits record $28.1bn revenue, but profit misses amid margin pressure and softer delivery outlook

South Africa

South Africa’s Top 40 index slipped 0.13% to 101,487.9 points, while the All Share index declined 0.06% to 108,837.1 points as investors digested mixed economic signals. Headline inflation rose modestly to 3.4% year-on-year in September, below the 3.5% forecast, driven by housing, utilities, and food, prompting expectations that the South African Reserve Bank may resume interest rate cuts. In energy developments, the government plans to reactivate the Pebble Bed Modular Reactor program by early 2026, while the 2025 Integrated Resource Plan anticipates over 105 GW of new generation capacity by 2039, with renewables expected to contribute more than half, reducing reliance on coal.

European Union

European shares closed slightly higher, with the STOXX 600 up 0.2% after a 1% gain in the previous session, as investors digested mixed Q3 earnings and macro developments. French stocks led gains, boosted by luxury groups LVMH and Hermès, while Edenred soared 19.6% on stronger-than-expected sales. Industrial and real estate stocks also rose, with Airbus, Safran, and Segro contributing. Mining shares lagged amid weaker gold, silver, and copper prices. Positive sentiment was supported by easing U.S.-China trade tensions, stabilising U.S. banking concerns, and coordinated European support for Ukraine, offsetting softer results from Nordnet and Coca-Cola HBC.

United States

U.S. stocks closed mixed as investors weighed a strong Q3 earnings season against stretched valuations and economic uncertainty. Industrials and consumer discretionary led gains, driven by General Motors, 3M, and aerospace/defense companies, while tech and growth stocks lagged, including Netflix. Warner Brothers Discovery surged on potential sale interest. So far, 87% of S&P 500 reporters have beaten expectations. Market sentiment was supported by optimistic U.S.-China trade comments, despite the ongoing government shutdown and Federal Reserve policy uncertainty, leaving investors cautious amid limited new economic data.

Asia

Asian stocks fell for a second consecutive day as weak earnings from tech megacaps weighed on investor sentiment. Chinese shares declined 0.4% in Hong Kong amid reports that the White House may impose software export curbs in response to Beijing’s rare earth restrictions. South Korea’s central bank held interest rates at 2.50%, balancing a housing resurgence and currency pressures while leaving room for future easing. SoftBank shares dropped over 6% following plans to issue $2 billion in U.S.-dollar bonds and €750 million in hybrid notes to fund AI investments, highlighting continued capital raising in the tech sector.

Commodities

Gold prices edged lower as a firmer dollar dampened demand, with investors awaiting upcoming U.S. inflation data for guidance on interest rate expectations. Oil prices, however, surged about 2.5% amid renewed supply concerns after the U.S. imposed sanctions on Russian oil giants Rosneft and Lukoil over the Ukraine conflict, with Britain and the EU also enacting related measures. Brent and WTI futures rose further following a surprise drop in U.S. stockpiles, though market scepticism regarding the long-term impact of sanctions constrained gains. Energy and geopolitical developments continue to drive commodity volatility.

Currencies

The U.S. dollar strengthened against major peers as traders awaited delayed U.S. inflation data and assessed rising U.S.-China trade tensions. The yen slipped to a one-week low amid anticipation of fiscal and monetary easing under Japanese Prime Minister Sanae Takaichi, while sterling weakened after U.K. consumer inflation remained steady at 3.8%, raising expectations of a potential Bank of England rate cut. The South African Reserve Bank held rates steady following three earlier cuts. Despite trade and policy uncertainties, traditional safe havens such as the yen, Swiss franc, and gold saw limited support, reflecting a cautiously balanced market.

Famous Brands Limited (FBR) +0.67%

Famous Brands delivered a strong first-half performance for the six months ended 31 August 2025, maintaining operational momentum despite a challenging consumer environment. Revenue rose 5.6% to R4.2 billion, while operating profit increased 5.8% to R393 million, reflecting a margin of 9.3%. Headline earnings per share grew 8.0% to 236 cents, supported by robust demand for its South African Quick Service Restaurant brands and improved efficiencies in Manufacturing and Logistics. The Group declared an interim dividend of 162 cents per share. Capital expenditure totalled R140 million, including investment in a new cold storage facility, while gearing improved to 0.84 times and return on capital employed strengthened to 34%.

Quilter plc (QLT) +1.09%

Quilter delivered another strong performance in Q3 2025, reporting its third consecutive quarter of net inflows exceeding £2 billion. Core net inflows rose 48% year-on-year to £2.2 billion, representing 7% of opening AuMA (annualised), driving total year-to-date inflows to £6.7 billion—already surpassing FY2024’s total. Group Assets under Management and Administration grew 7% quarter-on-quarter to £134.8 billion, supported by market gains and robust platform demand. The Affluent segment recorded £2.1 billion in net inflows, underpinned by strong IFA and Quilter channel growth, while the High Net Worth segment maintained steady new business momentum. Persistency remained stable at 91–93%, and adviser productivity improved 10% year-on-year, reinforcing Quilter’s operational resilience and growth trajectory.

Vunani Limited (VUN) +17.65%

Vunani reported improved interim results for the six months ended 31 August 2025, reflecting steady earnings growth across its diversified financial services operations. Revenue and premiums increased 8.8% year-on-year to R356.6 million, while profit after tax rose 8.3% to R24.7 million. Earnings and headline earnings per share both advanced to 9.5 cents, up from 6.7 cents in the prior period. Total comprehensive income grew to R25.2 million, with profit attributable to equity holders reaching R15.3 million. The results highlight Vunani’s progress in enhancing profitability and maintaining operational efficiency amid a challenging domestic environment.

Tesla (TSLA) -0.82%

Tesla reported record Q3 revenue of $28.1 billion, exceeding estimates, driven by strong EV sales ahead of expiring U.S. tax credits, though profit per share fell short at $0.50 due to tariffs, rising R&D costs, and declining regulatory credit income. Automotive gross margin was 15.4%. To sustain demand, Tesla launched lower-cost Model Y and Model 3 variants, while energy storage deployment rose 81%. The company plans volume production of Cybercab robotaxi, Semi truck, and Megapack 3 battery in 2026. Despite a projected 8.5% delivery decline, long-term investor confidence remains anchored in Elon Musk’s robotics and AI strategy.

CME Group (CME) -0.30%

CME Group beat Q3 profit estimates despite a 10.5% decline in average daily trading volumes across most asset classes, as lower volatility and stable energy prices reduced hedging activity. Clearing and transaction fees fell 5.3% to $1.23 billion, but record cryptocurrency volumes offset softer energy trading. Adjusted expenses were $486.6 million, supporting profit of $966.1 million ($2.68 per share) versus the $2.63 estimate. CME is diversifying through retail and digital initiatives, including a FanDuel partnership and plans for 24/7 crypto trading in 2026, while exploring round-the-clock access for other markets to broaden revenue streams.

Southwest Airlines (LUV) -2.65%

Southwest Airlines reported an adjusted Q3 profit of 11 cents per share, surpassing analysts’ expectation of a 3-cent loss, on the back of stronger travel demand and improved business bookings. Operating revenue reached $6.95 billion, ahead of the $6.29 billion estimate, supported by higher airfares and reduced competition following Spirit Airlines’ operational cuts. The airline expects record Q4 sales despite trimming revenue-per-seat-mile growth forecasts to 1–3% due to government shutdown impacts and delayed fleet retrofits. Cost discipline, including a 15% corporate workforce reduction, underpinned profitability, while strategic initiatives such as basic-economy fares and assigned seating aim to enhance future margins.

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