Electric Vehicle Pioneer’s Second Quarter Figures
looking good. Record corporate earnings and gains should be enough to send the stock higher in the coming days.
Teslas (ticker: TSLA) profit second quarter came in at $1.45 per share of $12 billion in sales. Wall Street was looking for earnings per share of $0.94 against revenue of $11.5 billion.
In addition, reported operating income came in at $1.3 billion. That’s a new quarterly record, nearly $500 million more than Wall Street expected, and something bulls will point to as another catalyst for the stock.
The shares were up about 0.9% in after-hours trading.
It has been a battle for Tesla stock since the company reported its first quarter figures on April 27. Since then, Tesla shares have fallen about 6%. The
for comparison, gained about 5% over the same period.
Year to date, Tesla stock is down about 7%, lagging behind comparable gains of 17% and 15% respectively.
Dow Jones industrial average.
The operating profit figure is a big positive for Tesla Bulls, especially as the number appears to be driven by the underlying profitability of Tesla’s auto business and not regulatory credits.
Regulated credit sales were $354 million, down from $518 million reported in the first quarter of 2021. Tesla generates revenue by selling credits earned by producing more than its fair share of zero-emission cars. Tesla’s bulls and bears have discussed at length how long credit sales will last and whether or not they should be pulled from reported results to get a better idea of the long-term profitability for the company.
Regardless of the treatment of credits in the second quarter, reported net income at $1.1 billion was much higher than credit sales in the second quarter. That’s kudos to Tesla bulls.
Automotive gross profit margins, excluding credit, were 25.8% in the second quarter, while the figure for the previous four quarters ended March was about 21.5%. Profitability looks strong.
Cash flow was also solid. Free cash flow was $619 million, up from $293 million in the first quarter. It was the fifth consecutive quarter of positive free cash flow for the company.
Tesla recorded a $23 million depreciation of Bitcoin in the second quarter. In the first quarter, Bitcoin trading generated a profit of $101 million. At the end of the first quarter, Bitcoin holdings totaled $1.33 billion. Investors will have to wait for the quarterly registration applications, but the book value should remain virtually unchanged.
Management scheduled a conference call at 5:30 p.m. Eastern Time to discuss the results. Analysts will want to hear about demand, new production capacity and the pace of innovation with Tesla’s driver assistance software.
Write to Al Root at firstname.lastname@example.org