Tesla Posts Record Quarterly Profit of $1.1 Billion, Stock Up 2%

27 Jul 2021 · 3rd Party Analysis

Tesla Posts Record Quarterly Profit of $1.1 Billion, Stock Up 2%


In Summary

  • Tesla reported record net income during Q2, up ten times from the year-ago quarter
  • The company also posted a $23m impairment charge on its bitcoin holdings

Tesla Inc. has produced a record quarterly profit for the quarter ended June even amid a global chip shortage and massive supply chain disruptions that have derailed the production line even for the biggest automakers in the world.

The electric-car maker has boosted both its top line and bottom line, beating analysts’ estimates. Earnings for the second quarter, according to the financial statement released by the company, arrived at $1.45 a share, on revenue of $11.96bn. Results surpassed expectations of earnings at $0.98 a share on revenue of $11.30bn. Tesla reported a net income of $1.14bn, the company’s first quarterly profit above $1bn. The financial achievement was ten times the net income in the year-ago quarter.

Revenue-based on automotive sales landed at $10.21bn, of which $354m, or roughly 3.5%, came from sales of regulatory credits. The company had already posted its delivery numbers for the last quarter before revealing its corporate earnings. Tesla had delivered 201,250 vehicles, and produced 206,421, for the quarter ended June 30.

Optimism Among Stock Market Participants

The EV maker also reported a revenue of $951m from its services category. The company now has 598 stores and service centers around the world.

As to Bitcoin, Tesla reported a $23m impairment charge related to the value of its bitcoin holdings. The result was placed as an operating expense under the “Restructuring and other” category. The car company said the book value of its cryptocurrency asset stood at $1.31bn.

“For the rest of this year, our growth rate will be determined by the slowest part in our supply chain,” Tesla CEO Elon Musk said during the earnings call with shareholders. “Chip supply is fundamentally the governing factor on our output.”

Tesla shares closed 2% higher on Monday as investors anticipated a better-than-expected corporate earnings report. After the bell, when the company released its quarterly results, the stock was lifted by an additional 1%. Tesla stock is now floating near $665 a share in pre-market trading.

Meanwhile, the broader stock market continues to be on a tear. As the heaviest week for earnings reports unfolds, market participants remain optimistic the results will deliver more data confirming the lofty valuations of companies are justified.

All three US indexes ticked up to fresh records for a second consecutive session on Monday. The Dow Jones Industrial Average kept pushing higher above the 35,000 thresholds and closed the session up 82.76 points, or 0.24%, to 35,144.31. The S&P500 and the Nasdaq Composite advanced 0.24%, and 0.03%, respectively.

Heading into the busy week, the bar has been lifted high for tech companies in this crunchtime for earnings. The biggest tech companies in the world are expected to provide insights into their financials for the second quarter.

Apple, Microsoft, and Google-parent Alphabet report earnings on Tuesday. US stock futures are under pressure. Dow futures, S&P futures, and Nasdaq futures are lower by 0.60% to 0.30%.

Meanwhile, in European stock trading, bourses across the continent are trading relatively muted after a non-eventful session on Monday. Yesterday, the pan-European Stoxx 600 slipped 0.08%, pulling back from its record high set Friday.

Bitcoin on Tuesday is struggling to hold above $37,000 per coin. The digital asset’s price was elevated as much as 18% yesterday to reach a session high of $40,500. Buying momentum, however, eased, and bitcoin reversed course and ended the day at $37,700, up 10% on the day.

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