Home News Tesla had arguably its weakest earnings and profits in years

Tesla had arguably its weakest earnings and profits in years

by SuperiorInvest

Key things

  • Tesla is expected to post adjusted earnings per share of $1.19 for the fourth quarter of 2022, compared to $0.85 in the year-ago quarter.
  • Revenue likely rose 38% to $24.4 billion.
  • Tesla said it delivered more than 405,000 cars in the latest quarter, missing analysts’ estimates.
  • Tesla was the top-performing stock in the S&P 500 last year due to faltering demand, supply chain issues and potential legal issues.

Tesla Inc. Elon Musk (TSLA), the best-performing stock in the S&P 500 last year, may bolster that performance by saying this week that fourth-quarter profit grew at the slowest pace in three years due to weaker demand and logistics issues.

Edited earnings per share (EPS) They are likely up 41% to $1.19 a year ago, according to Visible Alpha estimates. Revenue likely rose nearly 38% to $24.4 billion, the slowest growth rate since mid-2020. Tesla releases results after markets close on January 25.

The electric vehicle (EV) company has been dealing with a lot of internal issues in recent months, including logistics issues related to COVID and supply chain problems. Musk, the CEO, has sparked controversy with his takeover of Twitter, prompting some Tesla shareholders to call for his ouster. Musk also faces scrutiny from regulators, including a possible trading in the stock he sold in December and a trial over allegations he lied about potential plans to take Tesla private in 2018.

Externally, increased competition from rival EV makers, cooling economics and tepid demand among Chinese customers have prompted Tesla to reduce prices on several models in early January in an attempt to win business. Additionally, Tesla announced earlier in the year that it missed analysts’ estimates for new car deliveries in the latest quarter.

Tesla shares fell by almost two-thirds last year. A slight improvement in early 2023 sent Tesla shares down about 60% for the year, compared with a 26% drop for the S&P 500 consumer discretionary index.

Source: TradingView.

Tesla key statistics
Estimate for Q4 FY2022 Current for Q4 FY2021 Current for the 4th quarter of fiscal year 2020
Adjusted earnings per share ($) 1.19 0.85 0.27
Sales ($B) 24.4 17.7 10.7
Total car production (K) 439.7 (actual) 305.8 179.8

Source: Visible Alpha

Key Metric: Vehicle Production

Vehicle production is a key metric for Tesla as it needs to expand production to increase sales and profit. As production ramps up, Tesla will have to address supply chain and transportation capacity issues for new vehicles.

Tesla’s car production growth has slowed in the past few quarters. Although the company said in early January that it produced more than 439,700 cars in the last three months of 2022, higher than the forecast of 435,000.

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