Tesla’s first-quarter earnings were excellent. CEO Elon Musk even provided guidance for 2022. The beat was a surprise this time.
The corporation beat inflation by focusing on manufacturing and substituting materials. Before the bell, the stock climbed 6.9% to $1,044.45 The stock dropped 5% in pre-earnings trading on Wednesday.
Tesla (TSLA) earned $3.22 per share on record sales of $18.8 billion. Wall Street expected earnings per share of $2.20 to $2.30 on revenues of $18 billion. Tesla made $2.54 per share on $17.7 billion in revenue in Q4 2021.
Operating profit was $3.6 billion, compared to the $2.6 billion expected. Even without credit sales, operating profit surpassed Wall Street expectations.
Analysts expected a drop in earnings from the fourth quarter into the first quarter due to inflation. According to Barron’s calculations, the average price for a basket of metals used in EV batteries rose more than 70% from the fourth quarter.
It mentioned inflation in its press release. But Tesla’s cost per car fell in the fourth quarter. Surprising. Tesla buys batteries and materials on long-term contracts, for example. That can reduce the impact of rising spot costs.
Tesla’s first-quarter sales contained iron-phosphate, or LFP, batteries in nearly half of its vehicles. Those are lithium-ion batteries with greater performance without cobalt or nickel metals. LFP batteries don’t have as much power per cell, but Tesla claims a standard-range Model 3 with an LFP pack goes 267 miles per charge.
Then investors will be reassured. Tesla’s Shanghai plant closed in late March owing to Covid restrictions. However, the situation remains unsettled.
Musk’s midpoint volume growth of 55% would yield 1.45 million Teslas in 2022. Wall Street anticipates this. He also revealed Tesla is developing a robotaxi-specific vehicle. Tesla keeps investing considerably in self-driving software and hardware.
Options implied a 5% move up or down after the results were released. Tesla’s stock has fallen in three of the last four quarters. Each time, the corporation beat analyst expectations.
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