Tesla Crushes Q1 Estimates, Warns That Supply Chain Issues Are Far From Over

Tesla Crushes Q1 Estimates, Warns That Supply Chain Issues Are Far From Over

Tesla, the American electric vehicle company, released its first-quarter results today after the bell. The firm reported $18.76 billion in sales and $2.86 in earnings per share, up from $10.389 billion in revenue and 93 cents in earnings per share in Q1 2021. Tesla said it experienced various obstacles in the first quarter, including global supply chain, transportation, labor, and production constraints, which might hinder its ability to run its plants at full capacity.

Despite the recent inauguration of its Gigafactories in Berlin and Texas, which will construct the Model Y, the carmaker cautioned of continuing supply restrictions that might stymie future output. “Our own facilities have been working below capacity for several quarters as the supply chain has been the primary limiting factor,” the automaker stated in its financial forecast.

Tesla’s net income was $3.32 billion, up 658 percent from $438 million in the same time previous year. The company’s profit result is notable since it is by far the greatest in recent history, topping $1 billion over the company’s Q4 2021 net income figures. In terms of sales and net income, the results exceeded analysts’ forecasts. According to Yahoo Finance, experts predicted $17.8 billion in sales and $2.26 in profits per share for Tesla in Q1 2022.

After losing about 5% of their value during regular trading, the company’s shares are up roughly 4% in after-hours trade. The company’s quarter is difficult to criticize. Tesla’s revenue increased by 81 percent year over year, outpacing the 87 percent increase in automotive revenue during the same period. Furthermore, the firm’s operational expenditures increased just 15% year over year, providing the EV company a massive increase in its operating margin — from 5.7 percent in the previous quarter to 14.7 percent in the last quarter of 2021, and 19.2 percent in the most recent three-month period.

While Tesla’s total results in the quarter exceeded expectations, it was the company’s automotive division that stood out. Tesla’s “energy generation and storage” revenues, which include both energy storage and solar, came in at $616 million, a fraction of what it made in the first three quarters of 2021. The corporation did, however, outperform its $494 million top-line performance from the previous year. (Notably, the company’s solar deployments dropped substantially in the quarter, while energy storage deployments, measured in megawatt hours, increased from the previous quarter but fell short of the entire tally seen in quarters two, three, and four.)

Things seem excellent once again when we go further into the data. Tesla’s automotive gross margin reached a new high of 32.9 percent in Q4 2021, up from 26.5 percent in Q1 2021 and 30.6 percent in Q4 2021. Tesla’s revenue from regulatory credits more than quadrupled to $679 million from the previous quarter. Finally, in terms of large numbers, Tesla’s operating activities generated just under $4.0 billion in cash in the quarter, up 143 percent from $1.64 billion the year before. Tesla generated more positive operational cash flow in the fourth quarter of 2021 than it did in the first quarter of 2022, although the drop appears to be minor when compared to the year before.

Despite these positive figures, one data highlights the company’s difficulties. Tesla’s claimed “global car delivery” figure, which is based in days of available supply, reveals supply chain problems. From a high of nine days’ worth of automobiles in Q2 2021, Tesla only reported a third of that in Q1 2022, a mere three days. That amount is more in line with the company’s Q4 2021 outcome of four days’ worth of inventories at a relatively constant production pace. Same output, but with less slack? It appears to be a supply chain issue.