Plus: Commerce Sec. Lutnick shifts messaging on TikTok; Google AI overviews are outpacing competitors – for now.
In a previous season of life, hopping on earnings calls was a regular part of my reporting.
What I learned (other than I could never be an accountant) was that they mostly have a standard format: opening remarks, wins, challenges, future plans and then a detailed list of financial records. The presentation generally ends with stakeholder questions and a chance for leaders to offer more insightful explanations.
This week on its earnings call, Tesla deviated from this formula and left analysts and stakeholders with more confusion than answers.
Though the company’s revenue has been in decline for three quarters now, with its stock continuing to fall, Tesla leadership didn’t offer clarity on a pathway forward or reflection on its less than stellar performance, according to CNN.
The outlet reported that, “for an earnings call, there was zero talk of, um, earnings. And the overall message from Tesla’s top brass seemed to be: We are a robotics and AI company, and, someday soon, it’s going to be awesome.”
The organization’s leader Elon Musk said Tesla was in a “weird, transition period,” but otherwise wanted to draw more attention to the organization’s AI efforts.
“The company offered remarkably little detail on some of the most important factors” — like its mysterious new lower-priced model —“making our outlook lean more on imagination than realistic targets,” Truist’s William Stein told CNN.
Why it matters: Clarity and transparency have major value points for organizations. Stakeholder loyalty depends on how leadership addresses pitfalls, change and other challenges it may face.
Tesla’s shares dropped by more than 8% Thursday following the call. This shows the result of confusing messaging and a lack of confidence.
Choosing to ignore questions or slough off stakeholder concern is a risky comms strategy, and one that could create a reputation as careless, unserious and untrustworthy.
As Dan Ives of Wedbush Securities told CNN: “Communication on the call was less than stellar in terms of details, and I think that definitely played into the selloff that we’re seeing.”
Editor’s Top Reads:
- In the latest debate over TikTok’s presence in the States, Commerce Secretary Howard Lutnick said this week that the app will go dark if China doesn’t shift control over to the U.S. CNBC reports that Lutnick said, “We’ve made the decision. You can’t have Chinese control and have something on 100 million American phones.” His remarks come after President Donald Trump extended the deadline for Chinese parent company Bytedance to shift ownership of the app for a third time to Sept. 17. “Basically, Americans will have control. Americans will own the technology. Americans will control the algorithm,” Lutnick told the outlet. TikTok briefly shutdown for mere hours earlier this year after the 2024 decision was made to ban the app unless a U.S. buyer took over. Since then, Trump has continuously pushed the deadline, leaving people less and less concerned that the app is going away anytime soon. When action doesn’t align with messaging or promises fall by the wayside, words alone lose their impact. Lutnick’s remarks leave no room for interpretation, however, perhaps signaling a change in the threshold for what government leaders are willing to tolerate. It’ll be interesting to see how Trump responds, if he stands firm with Lutnick’s statement, or contradicts it altogether. CNBC reports that “it’s not clear where deal talks stand” with Trump most recently saying he has “very wealthy” buyers ready to make a deal. Either way, Lutnick has shifted the message, coming out more decisive and firmer on the topic.
- As more organizations worry about how Google search is affected by LLMs and what that means for visibility, reach and how information is consumed, new analysis suggests that Google is faring much better than expected. The Wall Street Journal reports that, “Google’s ubiquitous search tool has proven surprisingly resilient to competition from the likes of OpenAI, which is hoping people will skip the search box and ask its chatbot for answers instead.” Alphabet CEO Sundar Pichai told WSJ that Google’s AI Overviews now have “2 billion monthly users, up from 1.5 billion users in its last quarterly update. Google is also rolling out an ’AI Mode‘ that competes more directly with chatbots.” Search impressions, the links that show up in search, also grew by 49% from last quarter. Some challenges still exist though, like the fact that while users are still seeing plenty of links, people aren’t necessarily clicking on them if they get all the info they need from summaries. It’s likely that companies will still need to adapt how they share their message, with shorter, more concise language in order to be picked up by AI summaries. They’ll still need to track shifts in what’s dominating search, how they can get their audience to click links and where they’re showing up. But for now, it appears that “based on (Google search’s) performance so far in the AI age, it looks likely to come out far less scathed than many skeptics believe” which bodes well for companies with concerns the tool is phasing out.
- A San Francisco restaurant has apologized to an influencer it was working with after its co-owner, a highly sought after chef, left her in tears. Chef Luke Sung and business partner Eric Lin offered a microinfluencer a free meal for a TikTok post. But when she came into the restaurant, Sung was rude, belittling and made her feel like she didn’t have a big enough following to be working with them, according to The Independent. Instead of promoting what could have been a happy experience at a new hot spot, the influencer instead shared her horror story, sparking backlash and bad reviews. The restaurant owners soon took action, letting the chef go and apologizing. “Our chef’s behavior was unacceptable and he is no longer part of the team as a co-owner, a chef, or in any other way,” the restaurant said via Instagram. “That behavior does not reflect the remainder of our team. We want to create a space that’s welcoming and respectful to everyone. In this instance, we failed to do so.” When an employee (even a co-owner) goes rogue, businesses have to react. The restaurant’s swift action to let him go, apologize and reiterate their values can hopefully help them rebuild. It is imperative in times of trouble to be clear, be transparent and correct your mistakes. This is the only way to mitigate damage.
Courtney Blackann is a communications reporter. Connect with her on LinkedIn or email her at courtneyb@ragan.com.
The post The Scoop: Tesla’s earnings call leaves more confusion than clarity appeared first on PR Daily.
