After the shock of Netflix (NASDAQ:) subscriber failure earlier this week, many Nasdaq stocks were crushed yesterday, with Tesla (NASDAQ:) ending the day down nearly 5% on fears that Last night’s first quarter earnings did not disappoint.
That turned out not to be the case with $18.76 billion, up 81% and nearly $1 billion above expectations, while earnings hit a record share of $3.22 billion. dollars, or $3.3 billion. This is a simply staggering improvement considering that over the past year the company has made $5.5 billion.
On that basis, Tesla is on track to post $12.2 billion in full-year profits, assuming no deterioration in margins in the meantime, with stocks looking to open sharply higher when markets Americans will reopen later today.
There were concerns that the various COVID restrictions in China, which affected its Shanghai factory, as well as the various supply chain issues faced by the company in the first quarter, had impacted margins.
Those concerns appear to have been premature after gross margin rose in the first quarter to 32.9% from 30.6% in the fourth quarter and 26.5% a year ago, with the company saying it needed to increase. prices to offset supply chain challenges.
Free cash flow also jumped to $2.23 billion, well above estimates of $671.8 million, however, Tesla struggled to warn that supply chain issues were likely to continue throughout 2022.
Sales of regulatory credits also helped boost profits in the first quarter, with revenue of $679 million.
As the company looks ahead to the rest of 2022, despite problems at its Shanghai factory, the new factory in Germany has finally opened, albeit later than expected, but it should help Tesla boost production levels. as we look to the rest of this year. , despite a backdrop of rising costs and chip shortages. Production and deliveries are also expected to begin from the new Texas factory this month as well.
After delivering more than 310,000 vehicles in the first quarter and dropping just under 1 million vehicle deliveries in 2021, CEO Elon Musk said he expects Tesla to deliver up to 1 .5 million vehicles in 2022, an ambitious target and a decent increase from the previous target of 1.3. m, Musk saying he expected the third and fourth quarters to see significant improvement as new factories seek to increase production capacity and increase efficiency.
Of course, much of this will depend on the resilience of the company’s supply chain and its ability to source batteries. To that end, Tesla said it is diversifying its battery manufacturing, with half of its vehicles equipped with a lithium iron phosphate battery that contains no cobalt or nickel.
Management went on to say that it expects to achieve 50% annual growth in vehicle deliveries, a goal that a year ago might have seemed fanciful. Looking at the progress made in the first quarter, this objective seems within reach, as does the prospect of a doubling of profits.
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