Tesla on Wednesday reported a better-than-expected profit of $2.3 billion, despite a hit from the Covid-19 lockdowns in Shanghai, which weighed on profit margins in the second quarter.
Elon Musk’s ambitious electric-vehicle company posted about twice the year-over-year profit last quarter, but revenue missed guidance.
In recent weeks, Musk has made headlines for pulling out of a $44 billion acquisition of Twitter that has sparked a lawsuit from the social media giant.
Although Tesla’s earnings beat estimates, they fell short of those in the first quarter, its first consecutive earnings decline since late 2020, which coincided with a contraction in auto profit margins on rising costs.
And while revenue rose 42 percent to $16.9 billion, it came in below the $17.1 billion forecast by analysts.
The company cited opposition from Shanghai, where its factory closed part of the quarter. But Tesla said it ended the three-month period after the restart in China with “a record monthly production level.”
However, Tesla said supply chain challenges remain a headache as factory closures, labor shortages, logistics and other issues “limit our ability to consistently operate our factories at full capacity.”
During the quarter, Tesla liquidated about 75 percent of its Bitcoin holdings, which have plummeted in value in 2022.
– Record-breaking 2nd half –
Several analysts had dubbed the second quarter as the weakest of the year for Tesla, after the Shanghai plant closure and other supply chain issues pushed up costs.
But Tesla watchers are bullish for the second half of 2022 amid ramping up of factories in Berlin and Austin, Texas, and an expected return to normal production in Shanghai.
The company confirmed its production outlook for the year and said it was focused on a “record-breaking second half of 2022.”
Musk has shown boundless confidence in Tesla’s ability to disrupt the auto market, citing the company for hitting production targets for its core product, even as the high price of the vehicles remains unattainable for many consumers.
But Musk has been less optimistic about the economy as a whole of late, saying last month that a recession was “more likely than unlikely” and confirmed plans to cut the company’s workforce by about 10 percent.
Most recently, the controversial CEO has been embroiled in the chaotic battle with Twitter after Musk withdrew his takeover bid, citing concerns the social media company underestimated the number of fake accounts.
On Tuesday, a Delaware judge set an October trial to hear Twitter’s lawsuit over whether to force Musk to complete the transaction.
Musk’s attorneys had pushed for a February 2023 date, but the court, following Twitter’s desire for speed, set an October start.
Tesla shares were up 0.3 percent in after-hours trading at $744.99.
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