Tesla Inc. reported second-quarter earnings that beat Wall Street estimates, reflecting the company’s progress in getting production back on track while tackling supply-chain hurdles and Covid lockdowns at its factory in China.
The market leader in electric vehicles posted adjusted earnings of $2.27 a share, besting analysts’ expectations for $1.83 a share based on an average of estimates compiled by Bloomberg. But that was below the $3.22 Tesla made in the first quarter, marking the first sequential profit decline since the end of 2020.
“The bottom line is it wasn’t pretty, but it was a lot better than what a lot of investors were expecting,” said Gene Munster of Loup Ventures. “They are doing a good job navigating a difficult environment.”
Shares of the company traded little changed at $746.32 as of 5:00 p.m. in New York, losing the momentum of an initial spike after the results were announced. The stock had fallen 30% this year as of the close Wednesday in New York.
Production Forecast Intact
The Austin, Texas-based manufacturer left unchanged its production forecast for 50% average annual growth “over a multiyear horizon,” a sign of confidence it will be able make up for lost output in the second half of the year. But it said issues ranging from shortages of supplies and labor to logistical problems kept its factories from running at full capacity in the most recent quarter.
The first major US automaker to report second-quarter financial results, Tesla said Wednesday in a letter to shareholders that increasing production at its two newest plants — one in Germany and the other in Texas — will depend on the smooth launch of new vehicles and improved supply chains.
“The pace of production ramps in Austin and Berlin-Brandenburg will be influenced by the successful introduction of many new product and manufacturing technologies in new locations and ongoing supply chain related challenges,” it said.
Eyes on Model Y
Analysts are paying close attention to how quickly Tesla can ramp up output of its mass-market Model Y SUV from those two factories, and also introduce the long-awaited Cybertruck pickup in Austin. The company said it is “making progress” on the truck, which it plans to launch after boosting production of the Model Y.
Tesla said previously it delivered 254,695 vehicles worldwide in the quarter, up 27% year over year but down from its first-quarter record of 310,048. It was the first time in two years that the company failed to increase vehicle deliveries from the prior quarter. In April, Chief Executive Officer Elon Musk has predicted the company would produce more than 1.5 million vehicles this year. Tesla had made about 564,000 through the first half.
The EV maker’s revenue came to $16.9 billion, meeting the average of estimates. Revenue from the sale of regulatory credits totaled $344 million, down from $679 million in the first quarter.
Tesla said a Bitcoin impairment reduced its second-quarter earnings and that it has converted about 75% of its Bitcoin purchases into fiat currency.
Read more: Tesla Converts Most Bitcoin, Adds $936 Million to Balance Sheet
(Updates with analyst comment from third paragraph.)
