Tesla Posts Sequential Declines Across The Board In Q2 2022
Tesla (Nasdaq: TSLA) shares surged following the release of its Q2 2022 financials on Wednesday. The automaker recorded quarterly revenue of US$16.93 billion, down from Q1 2022’s US$18.76 billion but up from Q2 2021’s US$11.96 billion.
The topline revenue figure also barely beat the mean street estimate of US$16.39 billion from analysts. Following the announcement, Tesla’s shares rallied by as much as 6.1% when the market opened today.
Breaking it down, the company saw its automotive revenues decline to US$14.6 billion from US$16.86 billion last quarter. Automotive gross margin also went down to 27.9% compared to its last quarter counterpart of 32.9%.
The company also delivered a total of 254,695 vehicles during the quarter, a decrease from 310,048 vehicles last quarter. Production also fell during the quarter, notching 258,580 vehicles coming from last quarter’s 305,407 vehicle production.
“In Q2, we achieved record production rates across the company,” the company said in its Q2 2022 earnings update. “However, we saw a continuation of manufacturing challenges related to shutdowns, global supply chain disruptions, labor shortages, and logistics and other complications, which limited our ability to consistently run our factories at full capacity.”
This follows after Chinese automaker BYD surpassed Tesla as the world’s biggest electric vehicle brand in terms of delivery volumes. The Chinese firm sold around 638,157 electric and hybrid cars in H1 2022.
This is also in contrast with Tesla’s headline of making its “highest vehicle production month” back in June 2022.
Weighing in on Tesla’s Q2 results, Gerber Kawasaki CEO Ross Gerber is trying to put the decline in vehicle production and delivery numbers in another perspective.
“Tesla delivers. That’s the bottom line. Quarter after quarter no matter how hard things get,” Gerber tweeted.
Gross and operating profit margins also dwindled down to 25.0% and 14.6% at the end of the quarter, compared to last quarter’s 29.1% and 19.2%. The operating margin for the quarter, the company said, is “among the highest in the industry.”
Net income for the quarter came in at US$2.26 billion, also down from last quarter’s US$3.32 billion but up from last year’s US$1.14 billion. This translates to US$1.95 earnings per diluted share, which also beat the estimated US$1.83 per share by analysts.
Generated operating cash flow for the quarter came in at US$2.35 billion, a decline from last quarter’s US$4.00 billion. This led the firm to end with US$18.32 billion in cash and cash equivalents.
The firm also said it has “converted approximately 75%” of its bitcoin investment during the quarter, generating around US$936 million in proceeds. This mainly drove the US$902-million increase in cash and cash equivalents balance.
Tesla last traded at US$742.50 on the Nasdaq.
Information for this briefing was found via the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
