Tesla posts best-ever quarterly revenue and profit

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Topline

Tesla beat analysts’ expectations in its fourth-quarter earnings report Wednesday, though costs soared as the electric-vehicle giant led by the country’s richest man, Elon Musk, grapples with a gloomy macroeconomic outlook and growing investor frustration with Musk’s behavior.

Main facts

Tesla reported $24.32 billion in revenue in the fourth quarter of 2022, up 37% from the same period a year earlier and exceeding the $24.16 billion forecast by analysts.

Earnings came in at $1.19 per share, or $3.7 billion, well above the analyst consensus of $1.13 earnings per share.

“It was our best year ever on every level,” Musk claimed on a conference call with investors Wednesday, while Wedbush analyst Dan Ives called it a “flex the muscle” moment for the company in a tweet.

Tesla shares rose as much as 4% to $149 in after-hours trading before settling for a 1.7% gain.

Despite accurate estimates, Tesla’s report was far from perfect: It reported the worst gross profit margin since 2021, a 64% year-over-year increase in operating expenses and a 49% quarterly drop in free cash flow.

In a statement accompanying the financials, the company pledged to navigate the “uncertain macroeconomic environment” with “ruthless cost containment and cost innovation,” blaming the highest interest rates in nearly two decades thanks to brutal Federal Reserve hikes. , which Musk has often protested against.

Key background

The stock is up 34% year-to-date, gaining 0.4% on Wednesday after rallying to reverse a broader tech sell-off following Microsoft’s dismal earnings report after Tuesday’s close. Tesla slashed the prices of its cars by as much as 20% earlier this month in a surprising move that Morgan Stanley analysts called a “response to slowing growing demand relative to increasing supply,” with the company previously reporting quarterly vehicle deliveries that did not meet expectations. . Musk’s $44 billion acquisition of Twitter, which closed in October after six months of all parties airing their dirty laundry, weighed heavily on Tesla. Musk has been CEO of Twitter for the past three months, though he has indicated he hopes to appoint a replacement soon. Tesla shares fell as Musk sold $22.9 billion worth of stock in the company to fund his Twitter deal, even though Musk vowed in December not to sell Tesla stock for at least another two years. But Musk continued his commitment to Twitter on Wednesday by changing his profile name on the site to “Mr. Tweet” and admitting it’s hard to balance the social media giant and Tesla, write“It is not possible for me to solve every aspect of Twitter globally overnight while still running Tesla and SpaceX, among others.”

Crucial quote

“Twitter’s net worth, barring a few people complaining, of course, is gigantic,” Musk said Wednesday in response to an investor question about the decline in Tesla’s net worth since Musk bought Twitter. The billionaire boasted about his 127 million followers on the site, saying it indicates he is “reasonably popular” and that his platform is “an incredibly powerful tool for driving demand for Tesla.”

Large number

$467 million. That’s how much Tesla received in autoregulatory credits, about 2% of all revenue. The credits, which Tesla sells to other automakers subject to federal emissions guidelines, are a major driver of the company’s profitability, as Tesla can pocket nearly all of its sales.

TUSEN rating

We estimate that Musk is worth $160 billion, less than half of his fortune’s peak of $320.3 billion in November 2021, as Tesla’s shares plummeted about 65% – much more than the 30% fall of the tech-heavy Nasdaq during the same period.

tangent

Musk testified for about nine hours this week in San Francisco federal court as part of a civil lawsuit in which Musk sought billions in damages over his infamous 2018 tweet in which he said he secured funding to take Tesla private for $420 per share, leading the company’s stock to gain 6% before falling dramatically. The billionaire said 420’s association with marijuana was purely coincidental and testified that he believed he was “doing the right thing” by tweeting what he said was material non-public information for the benefit of private investors.

Read further

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Big Tech stocks lose $200 billion after Microsoft scraps earnings recession whistles (TUSEN)

Elon Musk trial: Tesla CEO says ‘I thought I was doing the right thing’ in testimonial via tweet (TUSEN)

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