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In the fourth quarter of last year, Tesla reported record net income, and the firm forecast that more software-related revenues will keep its margins greater than those of any other carmaker.
The Austin, Texas-based producer of solar panels and electric cars reported earnings of $3.69 billion, or an adjusted $1.19 per share, for the three months ending in December. According to FactSet, it exceeded analysts’ lowered $1.13 expectation. The company’s earnings increased 59% over the same time last year.
The $24.32 billion in revenue for the quarter fell short of the $24.67 billion that experts had predicted.
However, the business’s automotive gross profit margin, which is calculated as revenue less cost of goods sold, decreased from 30.6% in the fourth quarter of 2021 to 25.9% in the corresponding period of 2022.
The results come after a difficult year with “huge obstacles,” including as factory closures and supply chain concerns, CEO Elon Musk said in a teleconference with analysts.
According to several experts, demand had decreased because of expensive costs and rising interest rates until the business reduced prices by up to 20% on some models on January 13 in the US and China, its two main markets.
But according to Musk, demand is high, and the business has had its greatest year-to-date orders in Tesla history thus far in January.
Despite what is likely to be a decline in the automobile industry as a whole, he stated, “We anticipate demand will be good.” Demand vastly outstrips supply, according to Musk, who also mentioned that Tesla is gradually raising prices.
Ahead of the anticipated 50% annual growth rate, Tesla stated in its investor letter on Wednesday that it will create around 1.8 million vehicles this year. However, the letter’s prognosis section omitted a projection of delivery for the year. Tesla has previously stated that its yearly growth rate for deliveries will typically be 50%.
Additionally, Tesla reported that it had distributed its “Full Self-Driving” software to around 400,000 people and had earned $324 million from the program during the quarter. Despite its moniker, “Full Self-Driving” cannot really drive itself, and Tesla cautions drivers to always be prepared to take over.
In response to rising interest rates, the corporation acknowledged that there are macroeconomics-related uncertainties. In the letter, it was said that “in the short term, we are speeding our cost reduction plan and moving toward greater production rates, while remaining focused on delivering on the next phase of our roadmap.
Due to the uncertainties surrounding coronavirus cases in China and overall economic concerns, Tesla’s projection for deliveries this year was described as “pretty vague” by Edward Jones analyst Jeff Windau.
He remarked, “I simply believe they’re probably being a bit more prudent and cautious starting the year. Their strategy isn’t really any different from what we’ve observed from other businesses, we say.
Tesla’s stock increased little on Wednesday, ending at $144.43. In prolonged trading after the earnings announcement, they increased by less than 1%.
The shares of the business fell 65% last year on worries that Musk was preoccupied with his $44 billion acquisition of Twitter. But this year, they have increased by nearly 35%.
Price reductions that started on January 13 increased worries on Wall Street that demand for Teslas was declining as fierce competition from startups and established manufacturers arrived.
What do you think of that record Tesla company Q4 profit? Please let us know in the comments.