Tesla Q2 2022 Earnings Report Recap

^{Source: Predictions based on analysts' consensus from Visible Alpha}

Tesla (TSLA) Financial Results: Analysis

Tesla Inc. (TSLA) reported Q2 FY 2022 earnings results that were mixed relative to analysts' expectations. Adjusted earnings per share (EPS) solidly beat estimates, rising 56.6% compared with the year-ago quarter. Revenue matched analyst forecasts, rising 41.6% year over year (YOY). The company said that revenue growth was driven by increases in vehicle deliveries and average selling price, as well as by growth in other parts of the business. Profitability was negatively affected by higher costs associated with raw materials, commodities, and logistics, and by the prolonged shutdown of the company's facilities in Shanghai due to COVID-19 restrictions.

TSLA Vehicle Production

The number of vehicles produced by Tesla rose 25.3% YOY. The company announced that it had produced 258,580 vehicles for Q2 prior to the earnings report. Tesla's primary business is making electric vehicles, and it needs to continue expanding production in order to grow revenue and profits. The company increased its production of Model S/X vehicles by over 600% YOY, while Model 3/Y production grew at a much more modest 19% YOY.

TSLA Outlook and Stock Performance

Tesla indicated plans to grow its manufacturing capacity as rapidly as possible. It aims to achieve 50% average annual growth in vehicle deliveries in the coming years. Likewise, efforts to reduce costs associated with manufacturing and operations could lead to an acceleration in both hardware- and software-related profits. Tesla cited new factories in Berlin-Brandenburg and Austin as key in increasing production capacity.

Shares of Tesla stock were up 2.1% in extended trading hours immediately following the company's earnings release Wednesday, and continued to climb Thursday, up nearly 7.5% in midday trading. Tesla stock has outperformed the broader market in the last year, providing 1-year trailing total returns of 12.4% compared with -8.9% for the S&P 500.

TSLA Earnings Call Recap

Tesla Chief Executive Officer (CEO) Elon Musk spoke with analysts in a conference call after the Q2 results were released on Wednesday after the market close.

“We have the potential for a record-breaking second half of the year,” Musk said.. “The past few years have been quite a few force majeures, and it’s been kind of supply chain hell for several years.'

Tesla's next earnings report (for Q3 FY 2022) is expected to be released on Oct. 19, 2022.