Source: Wall Street
Author: Li Dan
Tesla, Inc. 's revenue in the fourth quarter reached a record high for the second consecutive quarter, but the gross profit margin of the automobile business in the fourth quarter did not rise as expected, but fell by 2 percentage points. in the fourth quarter, foreign exchange had a negative impact on revenue of US $1.4 billion and profits of more than US $300m.
Tesla, Inc. 's income continued to hit record highs in the last quarter of last year, but gross margins on car sales failed to reverse the declining trend.
Tesla, Inc. 's shares, which closed up nearly 0.4 per cent on Wednesday, fluctuated upward in after-hours trading after the results were announced, rising nearly 4 per cent after trading and now up nearly 2 per cent.
Revenue has reached a record high for two months in a row, and profits are higher than expected.
After US stock market trading on Wednesday, 25th US Eastern time, Tesla, Inc. announced that operating income in the fourth quarter hit a record high for two months in a row, operating profit and net profit also reached a single-quarter record high, revenue and profit were higher than Wall Street expectations:
Fourth-quarter revenue was $24.318 billion, up 37 per cent from a year earlier, setting a new quarterly high for the second consecutive quarter, with analysts expecting $24.07 billion and 56 per cent year-on-year growth in the third quarter.
In the fourth quarter, the adjusted EPS under non-non-GAAP standards was $1.19, an increase of 40% over the same period last year, setting a new record for EPS set in the first quarter of $1.07. Analysts expect EPS to be $1.12 in the third quarter, up 69% from the same period last year. EPS in the fourth quarter was $1.07, up 57% from the same period last year, and 98% in the third quarter.
Adjusted net profit in the fourth quarter was $4.106 billion, setting a new high of $3.318 billion in the first quarter, an increase of 43 per cent year-on-year and 103 per cent in the third quarter.
Fourth-quarter operating profit was 3.901 billion US dollars, up 49 per cent year-on-year and 84 per cent in the third quarter. Fourth-quarter operating profit fell to 16.0 per cent from 17.2 per cent in the third quarter, still rising 129bp, or 1.29 per cent, compared with the fourth quarter of 2021.
The gross profit margin of the automobile business in the fourth quarter fell by 2 percentage points instead of rising month-on-month as expected.
Although revenues and profits were sound, Tesla, Inc. paid the price of declining profit margins. The financial report shows that:
The company's overall gross margin in the fourth quarter under the GAAP caliber was 23.8%, down 1.3% from 25.1% in the third quarter, and analysts expect it to rise to 25.4% from the previous quarter, down 3.6% from the fourth quarter of 2021.
The gross profit margin of the automobile business in the fourth quarter fell 2 percentage points to 25.9% from 27.9% in the third quarter.Analysts expect it to rise to 28.4% from a month earlier., a sharp drop of 4.66 percentage points from the same period last year.
Free cash flow in the fourth quarter was $1.42 billion, down 49% from a year earlier and well below analysts' expectations of $3.13 billion.
Capital expenditure in the fourth quarter was $1.86 billion, up 3% from a year earlier, below analysts' expectations of $1.9 billion.
Tesla, Inc. explained that the company's average selling price (ASP) of cars has been on an overall downward trend for many years, and it is important to improve the affordability of cars to become a manufacturer of millions of cars. Although ASP halved between 2017 and 2022, the company's operating margin continued to improve, rising from negative 14% to positive 17% during that period.
Wall Street has mentioned that Musk made a rare deep sharing at the end of 2022. He predicts that there will be a fairly severe recession in 2023, as severe as in 2009. During a recession, profit margins will be low or even negative. Tesla, Inc. 's gross profit margin is higher than that of all other companies, which gives Tesla, Inc. more room to reduce his gross profit margin so as to maintain or increase demand.
In the fourth quarter, foreign exchange had a negative impact on revenue of US $1.4 billion and on profits of more than US $300m, an increase of at least 20 per cent over the third quarter.
In the financial report, Tesla, Inc. summarized some factors affecting revenue and profitability in the fourth quarter. The positive factors include:
Excluding the influence of foreign exchange, the average selling price (ASP) of cars rose year-on-year.
Increase in car deliveries (despite the profit headwind factor of low utilization of new factories)
Growth in revenue and gross profit from other businesses of the company
CEO Musk related taxes and fees based on stock compensation and payroll fell.
Negative factors include:
The negative impact of foreign exchange, of which the negative impact of foreign exchange on revenue reached 1.4 billion US dollars, and the negative impact on profits exceeded 300 million US dollars. Wall Street noticed that the impact on profits exceeded 250 million US dollars in the third quarter, at least 20 per cent higher than the negative impact in the third quarter.
The cost of raw materials, commodities, logistics, warranty and expedited delivery has increased.
4680 the cost of climbing battery production.
The revenue from "selling carbon" surged 63% from the previous quarter to the third highest in a single quarter.
Tesla, Inc. 's strong rebound in revenue from "selling carbon", a major driver of past profits, helped boost revenue growth in the fourth quarter.
In the fourth quarter, Tesla, Inc. 's income from selling carbon credits reached $467 million, up 63.3% from an one-year low of $286 million in the third quarter, making it the third highest level in a single quarter. it is still 31.2% short of the all-time high of $679 million set in the first quarter of 2022.
The output of factories all over the country hit a record high in the fourth quarter. It is expected that the output of factories in Shanghai will not increase significantly in the near future.
Earlier this month, Tesla, Inc. announced that 405300 vehicles would be delivered in the fourth quarter, another record high for a single quarter, but for the third consecutive quarter it was lower than market expectations. The total delivery volume for the whole year of 2022 was 1.31 million, far below Tesla, Inc. 's own annual target and nearly 13% less than the target of 1.5 million vehicles. Tesla, Inc. produced 439700 cars in the fourth quarter, slightly higher than the market expectation of 438800.
In the financial results released on Wednesday, the production and sales figures are consistent with the above. However, Tesla, Inc. pointed out that production at factories around the world reached new quarterly highs in the fourth quarter, and the company continued to gradually balance production and delivery volume.
According to Tesla, Inc., deliveries in the third month of the second quarter accounted for 74 per cent of total deliveries in that quarter, falling to 64 per cent in the third quarter and 51 per cent in the third month of the fourth quarter. The company is working to reduce the proportion of deliveries in the third month of each quarter to make delivery more balanced throughout the quarter, which helps reduce the average cost per car.
As for the Shanghai plant, Tesla, Inc. said that the production and delivery challenges in 2022 are mainly concentrated in China. The Shanghai plant has been close to 100% capacity for several months, but we do not expect a significant month-on-month increase in production in the near future. The Shanghai plant remains the company's main export center, supplying most of the car market outside North America.
Edit / Jeffy