How to interpret Tesla Q2 FY2022 earnings report?

$Tesla(TSLA.US)$ reported Q2 earnings on Wednesday, and the results sent the stock up slightly in premarket hours.

Key takeaways:

1. Revenue miss

Tesla reported second-quarter revenue of $16.93 billion, up 42% year-over-year. The total missed a Street estimate of $17.39 billion.

The miss in revenue came from the automotive business. This was followed mainly by a halt in production in Shanghai, the region suffering from the Covid lockdown.

2. EPS beat

Tesla reported adjusted earnings per share of $2.27 in the second quarter, beating $1.81 expected, according to Refinitiv

3. Automotive gross margin down

Automotive gross margin came in at 27.9%, down from 32.9% last quarter and 28.4% a year ago, impacted by inflation and more competition for EV components.

However , Tesla gross profit continue to be better than automotive peers.
$General Motors(GM.US)$ and $VOLKSWAGEN AG(VLKAF.US)$ are expected to generate Q2 gross profit margins of roughly 16% and 18%, respectively.

4.Bitcoin converted to fiat

As of the end of Q2, Tesla have converted approximately 75% of Bitcoin purchases into fiat currency, added $936M of cash to balance sheet. Musk said it was to improve the cash position, not because of the currency price trend.

Overall, Tesla continued to deliver better than Wall Street expectations, even as the epidemic significantly slowed car production deliveries

What's next？

The company highlighted ramp-ups at factories. With each of the Fremont and Shanghai factories achieving their highest-ever production months and new factory growth, Tesla is projecting 50% average annual growth for vehicle deliveries going forward.

Quiz of Today

1. EPS can't be used to ______.

A、Look for a stock with high dividends.

B、Distinguish blue-chip stocks and junk stocks.

C、Look for industry leaders.

2. Which part of the earnings report do you care most about?

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