Tesla once again exceeded profit expectations. However, the profit decreased.
Tesla announced earnings after the bell, resulting in a slight increase in the stock in after-hours trading. According to Tesla's second-quarter 2022 financial report, revenue was 16.93 billion US dollars, a 42% year-on-year increase. Net income was 2.269 billion US dollars, compared to 1.142 billion US dollars in the same period last year. Tesla's stock price rose by 5.57% in after-hours trading following this announcement.
Tesla once again exceeded profit expectations.
The company reported that in the first quarter of 2021, revenue was 16.93 billion US dollars, a 42% increase from the previous quarter's 18.75 billion US dollars. The revenue growth was partially driven by an increase in Tesla's automotive deliveries. Total revenue from the automotive segment was 14.6 billion US dollars, a 43% increase from the same period last year.
No surprises were found in this data. On July 2, 2022, Tesla announced its total vehicle production & ampere; for the second quarter of 2022. Tesla delivered a total of 0.254 million vehicles in the second quarter, including 16,162 Model S/Xs and 238,533 Model 3/Ys, a year-on-year increase of 26.2%, but a sequential decrease of 18%, falling below analysts' expected 0.35 million vehicles.
If it is assumed that Tesla's average selling price is 0.055 million US dollars, then the automotive sales revenue is roughly 13.75 billion US dollars, combined with carbon credit revenue and rental income, resulting in approximately 14.6 billion US dollars in revenue, which approximately meets expectations.
Tesla's second-quarter profit fell by 32%.
Due to significant pricing pressure in the entire industry's supply chain, Tesla raised prices for its entire range of electric vehicles. However, Tesla's second-quarter profit dropped by 32% from the record level set in the first quarter. It suffered from supply chain disruptions, chip shortages, and a 22-day shutdown at its large factory in Shanghai.
Computer chips are not the only raw material facing shortages and price hikes. At the London Metal Exchange, nickel – a key component in electric vehicle battery manufacturing – rose by around 20% to $21,200 per ton. The price of battery-grade lithium carbonate has risen by about 60% since early 2021.
Tesla sold about 75% of its holdings in bitcoin.
Tesla also stated that by the end of the second quarter, it had sold approximately 75% of its bitcoin holdings, an amount equivalent to about $0.936 billion, which has been added to its balance sheet. In 2021, Tesla announced the purchase of $1.5 billion worth of bitcoin.
The most valuable and popular cryptocurrency is bitcoin, known for its volatile price swings. A year ago, bitcoin peaked at $0.067 million, but by the end of June this year, the price dropped back below $0.02 million, a decline of over 60%. Based on the average price calculations, Tesla may hold around 0.042 million bitcoins. According to recent price trends, if Tesla does not liquidate, the depreciation losses from just bitcoin could reach $0.44 billion.
$Bitcoin (BTC.CC)$
The sale of bitcoin not only offset the depreciation losses on bitcoin but also generated $936 in cash for buying Tesla.
What is your valuation of Tesla?
Tesla's price-to-earnings ratio currently exceeds 100 times, while the average price-to-earnings ratio for the auto industry is around 50 times. Tesla's delivery growth rate over the past 5 years has been 50%, contributing to its high valuation. If growth stops, Tesla's valuation will return to a more rational level.
Based on Tesla's 50% delivery guidance, it is expected to deliver approximately 1.4 million vehicles. Although Tesla produced a total of 0.56 million vehicles in the first half of the year, maintaining the 1.4 million delivery target represents an average capacity of 0.42 million vehicles per quarter in the third and fourth quarters.
CEO Elon Musk said on Wednesday's earnings call that Tesla is producing over 1,000 vehicles per week outside of Berlin in June. He expects the company's new factory in Austin, Texas to surpass the milestone of over 1,000 vehicles per week in the coming months. Tesla plans to increase the production capacity of the Shanghai factory from 0.45 million vehicles to 0.75 million vehicles.
How do you view Tesla's second quarter financial report? What is your opinion on Tesla's valuation? $Tesla(TSLA)$
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