Tesla Has Traders Wanting More as Profit Beats, Stock Dips
(Bloomberg) - Tesla Inc. posted record earnings in the first quarter, bypassing a shortage of industrial chips, improving its manufacturing and even making money on Bitcoin.
Yet the EV maker’s shares fell as much as 3.1% in late trading after the results were announced Monday. This is a sign of the high expectations Tesla is now facing after gaining eight times its stock last year. Among the analysts disputes: Tesla didn't offer a specific estimate for vehicle deliveries in 2021.
Chief Executive Officer Elon Musk urges ramping up production and maintaining Tesla's dominance in the electric vehicle market, but competitors are aggressively moving in. Musk said demand on Monday is higher than ever before, but with no further numbers, investors shrugged.
"It's all good, but there isn't much news and it wasn't a blowout," said Gene Munster of Loup Ventures. "Everything happened what people thought."
Bitcoin Boost
The company pulled a new lever on its juice profits - bitcoin - during the quarter and generated $ 101 million in revenue after selling about 10% of its stakes.
The profit from Bitcoin, regulatory credits, and tax breaks contributed roughly 25 cents to Tesla's adjusted earnings of 93 cents per share. This allowed the automaker to beat Wall Street's average estimate of 80 cents, Dan Levy, an analyst at Credit Suisse, wrote in a note on Monday.
Zachary Kirkhorn, Tesla's chief financial officer, said Tesla valued Bitcoin as a way to store cash while maintaining liquidity, especially with traditional investment returns that are so low.
"We believe in the value of Bitcoin over the long term," he said on a conference call. "Our intention is to keep what we have for the long term and to continue to accumulate bitcoin from our customers' transactions in vehicle purchases."
Bitcoin was up 1.9%, trading above $ 54,000 after this confirmation of Tesla's commitment to the cryptocurrency.
The company announced its purchase earlier this year and also said it would accept it as a form of payment. This surprising announcement helped increase Bitcoin's legitimacy and resulted in an increase in value.
The story goes on
Chip deficiency hurts
Tesla results begin with a year in which the Palo Alto, California-based automaker will expand operations to three continents, including the completion of new factories in Austin, Texas and Berlin. Tesla expects shipments to grow by 50% annually "over a period of several years," which is consistent with the previous wording. This means that around 750,000 cars will be delivered this year.
That didn't excite investors, however - and analysts hoping for additional support from Musk on the call were disappointed.
Tesla fell 2.5% to $ 719.86 in late-night aftermarket trading. The session rose 1.2% to $ 738.20.
The company delivered more than half a million cars in 2020 and reported deliveries of 184,800 cars worldwide in the first quarter. This exceeded the last three months of 2020 by around 4,000 vehicles - despite a lack of semiconductor deliveries.
Read more: The world lacks computer chips. Here's why: QuickTake
Tesla and other automakers have had to cope with strained supplies of chips and other materials. This is an unexpected headache that occurs as they ramp up production to meet higher consumer demand amid the pandemic. Advisor AlixPartners said the chip shortage could cost automakers $ 61 billion in lost revenue this year.
"That's a big problem," Musk said on the call. "Q1 had one of the toughest supply chain challenges we have ever faced."
The CEO assumes that the bottlenecks will continue to affect the company in the current and third quarters.
Growing EV Pie
The electric vehicle leader is facing a new wave of competition as several new models hit the ground this year from startups like Amazon.com Inc.-backed Rivian Automotive Inc. and established automakers like General Motors Co. and Volkswagen AG Market.
Tesla tried to reassure investors in its quarterly release by noting the growing demand for electric vehicles and its own efforts to rapidly expand production capacity. "As more OEMs join our mission and bring electric vehicles to market, we believe that consumer confidence in electric vehicles continues to grow and more customers are willing to make the switch," it said in a statement.
Tesla's revenue rose 74% to $ 10.39 billion in the first quarter from January to March, which is close to analysts' estimates of $ 10.41 billion. Regulatory loan revenue rose to $ 518 million for the quarter, up from $ 401 million in the final quarter of 2020.
The company makes more money selling these loans to other automakers than its core business, making and selling cars. This is a potential problem for Tesla as more established automakers begin offering their own line of electric vehicles - and may not need to buy as many loans in the future, even as CO2 emissions standards tighten around the world.
Tesla stated that building cars is getting better and more efficient. The automotive gross margin of 26.5% was above the Bloomberg consensus of 24.2%. The company attributed the increase to cost reductions that outperformed lower average sales prices.
Deadly crash questions
The company questioned concerns about a Model S fatal accident in Texas earlier this month, believing someone was in the driver's seat at the time. Tesla warned that not all data could be retrieved from the vehicle, which contradicts the initial comments from the police that "no one" drove. This led to speculation that autopilot, Tesla's name for its driver assistance function, was a possible contributing factor to the fatal crash.
"We were able to determine that the steering wheel was indeed deformed, which led to the likelihood that someone was in the driver's seat at the time of the accident," said Lars Moravy, Tesla's vice president of automotive engineering, on the company's earnings call.
The automaker is working with federal regulators on its investigation, Moravy said.
The crash near Houston killed two men and triggered probes from the National Highway Traffic Safety Administration and the National Transportation Safety Board.
Read More: Tesla Crash Spurs Probes After Two Dice That Nobody Drives
(Updates with CFO comment in eighth paragraph; adds details.)
For more articles like this, please visit us at bloomberg.com
Subscribe now to stay up to date with the most trusted business news source.
© 2021 Bloomberg LP
continue Reading
Comments
Post a Comment