Tesla reported earnings after the bell, and the results sent the stock up slightly after hours.
According to Tesla's second quarter 2022 financial results, revenue was $16.93 billion , up 42% year-over-year. net income was $2.269 billion, compared with $1.142 billion in the same period last year. Tesla's share price rose by 5.57% in after-hours trading following this announcement.
Tesla beat earnings estimates again
The company reported revenue of $16.93 billion in the first quarter of 2021, an increase of 42% compared to $18.75 billion in the prior quarter. Revenue growth was driven in part by an increase in the number of cars Tesla delivered. Revenue from the automotive segment totaled $14.6billion, an increase of 43% compared to $10.2 billion a year earlier.
No surprises are to be found in this data. On July 2, 2022, Tesla announced its vehicle production & deliveries for Second Quarter 2022. A total of 254,000 Tesla vehicles were delivered in the 2nd quarter, including 16,162 Model S/Xs and 238,533 Model 3/Y, up 26.2% from a year ago, but down 18% sequentially and below analysts' expectations of 350,000 units.
If we assume Tesla's average selling price of $55,000, then the car sales revenue will be approximately 13.75 billion dollars, plus carbon credit income and car rental income, so a revenue of 14.6 billion US dollars is generally in line with expectations.
Tesla's second-quarter profit fell 32%
Due to significant supply chain price pressure across the industry, Tesla has raised prices across its entire line of electric vehicles. However Tesla's second-quarter profit fell 32% from record levels in the first quarter. It suffered through supply chain disruptions, chip shortages and a 22-day shutdown at its gigafactory in Shanghai.
Computer chips are not the only raw material seeing shortages and price increases. Nickel-- a crucial component in EV battery making -- is up around 20% at $21,200 per ton on the London Metals Exchange. Battery-grade lithium carbonate prices are up around 60% from early 2021 levels.
Tesla sold around 75% of its bitcoin holdings
Tesla also said it sold around 75% of it bitcoin holdings by the end of the second quarter, a figure equal to around $936 million, which was added to its balance sheet. In 2021, Tesla announced the purchase of bitcoins worth $1.5 billion.
The most valuable and popular cryptocurrency is Bitcoin, whose price fluctuates dramatically. A year ago, bitcoin peaked at $67,000, but at the end of June this year, the price plunged back below 20,000, a drop of more than 60%.Tesla may hold approximately 42,000 bitcoins based on the previous average price. Based on recent price movements, Tesla's impairment loss on bitcoin alone could reach $440 million if Tesla does not close out its position.
The sale of Bitcoin not only eliminated the impairment loss on Bitcoin, but also generated $936 million in cash for Tesla.
What is your opinion of Tesla's valuation?
Tesla's P/E ratio is currently over 100 times, while the average P/E ratio for the auto industry is approximately 50 times. Tesla's delivery growth rate over the past five years is 50%, which has contributed to its high valuation. Tesla's valuation will return to rationality if growth ceases.
Based on Tesla's 50 percent delivery guidance, approximately 1.4 million vehicles will be delivered. Although Tesla produced a total of 560,000 units in the first half of the year, if the delivery target of 1.4 million units is maintained, this represents an average capacity of 420,000 units for the third and fourth quarters.
CEO Elon Musk, on an earnings call Wednesday, said Tesla’s new factory outside of Berlin surpassed 1,000 cars per week in June, and he expects the company’s new factory in Austin, Texas to exceed the 1,000 per week production milestone in the next few months.Tesla plans to increase the capacity of its Shanghai plant from 450,000 units to 750,000 units.
What do you think of Tesla's second quarter earnings report? What is your opinion of Tesla's valuation? $Tesla Motors(TSLA)$
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