The company posted a net profit of more than $2.7 billion in
the last quarter, which was nearly 7.6 per cent up on a quarterly basis.
Shares of the company fell 0.71 per cent at the close of
trading to $291.26 on Wednesday, giving it a market value of $912.65 billion.
Shares dropped 4.35 per cent in after hours trading at 7.10pm New York time.
The company's shares are up about 169.44 per cent since the
start of the year. This is the company’s 16th straight profitable quarter and
seventh consecutive three-month period with more than $2 billion in profit.
The second quarter was a “record quarter on many levels with
our best-ever production and deliveries”, Tesla said.
“We are excited that we were able to achieve such results
given the macroeconomic environment we are currently in … the challenges of
these uncertain times are not over, but we believe we have the right
ingredients for the long-term success of the business through a variety of
high-potential projects,” the company said.
"One day it seems like the world economy is falling
apart, next day it's fine ... we are in, I would call it, turbulent
times," Elon Musk, Tesla's co-founder told analysts on a conference call.
Total revenue during the quarter jumped 47 per cent to more
than $24.9 billion, exceeding analysts’ expectations of $24.4 billion. It was
6.8 per cent up on a quarterly basis.
This was the fourth time in a row the company reported $20
billion or more in sales.
The Elon Musk-owned company delivered 466,140 vehicles in
the June quarter, up 83 per cent on a yearly basis. Analysts surveyed by
Bloomberg had expected Tesla to ship 448,350 cars during the quarter.
The company produced 479,700 vehicles during the period,
including 19,489 model S/X cars and 460,211 model 3/Y cars. In the same period
last year, it produced 258,580 vehicles.
Last month, Tesla said it was cutting prices of its premium
car models in China by more than 4.5 per cent. It has also lowered prices in
other markets, including the US and UK, in an effort to gain an advantage over
its competition.
“We are focusing on cost reduction, new product development
that will enable future growth, investments in R&D [research and
development], better vehicle financing options, continuous product improvement
and generation of free cash flow,” Tesla said.
The company's operating income decreased 3 per cent yearly
to almost $2.4 billion while operating expenses surged 21 per cent to $2.1
billion in the second quarter.
The company said its operating income dipped primarily due
to reduced average selling price of vehicles and increase in expenses driven by
coming cyber truck and other large projects related to artificial intelligence.
However, it maintained a healthy operating margin at nearly
10 per cent, even with price reductions in the first half of the year.
“This reflects our ongoing cost reduction efforts, the
continued production ramp success in Berlin and Texas and the strong
performance of our energy and services businesses,” Tesla said.
Thomas Monteiro, senior analyst at Investing.com, a
financial markets platform that has offices in the US, China, Spain and South
Korea, told The National: “Tesla has demonstrated its remarkable capabilities.
“Despite lower car prices, the company managed to mitigate
the already-expected decline in margins, showcasing Elon Musk's adeptness at
steering the company through both prosperous and challenging times.
“Overall trajectory of the company remains positive …
investors should exercise caution before betting against Tesla, as it continues
to exceed expectations and enhance its long-term prospects.”
Tesla's automotive revenue, which constituted more than 85
per cent of company’s total sales in the June quarter, rose 46 per cent
year-on-year to almost $21.2 billion, while energy generation and storage
revenue rose 74 per cent yearly to more than $1.5 billion.
Services and other streams of revenue reached $2.1 billion,
nearly 47 per cent up on an annual basis.
Tesla, which went public in 2010, said its cash, cash
equivalents and investments “increased sequentially by $700 million to $23.1
billion” in the second quarter. It was driven mainly by a free cash flow of $1
billion, partially offset by other financing activities, including debt
repayments.
The Texas-headquartered company said it was planning to grow
production “as quickly as possible” in alignment with the 50 per cent compound
annual growth rate. For 2023, Tesla aims to produce about 1.8 million cars.
“We have ample liquidity to fund our product road map,
long-term capacity expansion plans and other expenses … we will manage the
business such that we maintain a strong balance sheet during this uncertain
period,” Tesla said.
Tesla produces its vehicles in Fremont, California; Austin,
Texas; Shanghai, China; and Berlin, Germany. The company said it remained on
track to begin production of its cyber trucks later this year at its
gigafactory in Texas.
In the previous quarter in its energy segment, Tesla’s solar
deployments remained flat at 66 megawatts. This was due to a high interest rate
environment that is causing postponement of solar purchasing industrywide, the
company said.
Meanwhile, the energy storage deployments increased by 222
per cent year-on-year in the last quarter to 3.7 gigawatt hours.
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