A year ago he won the Covid-19 challenge: this year, if he doesn’t win, he still manages to do much better than his rivals in the midst of the global chip crisis: it is Tesla, the American electric car giant founded and managed by Elon Musk, which has produced a very respectable balance sheet for the third quarter of the year.
The quarterly report is not all roses and flowers, and this can also be seen from the performance of the stock, which has pointed down in the afterhours trading on Wall Street.
But Tesla reported a net profit (GAAP) of $ 1.62 billion, surpassing the $ 1 billion mark for the second time, up sharply from net profit of $ 331 million in Q3 2020, and to record for the third consecutive quarter.
Adjusted EPS was $ 1.86, better than the $ 1.59 expected from the Refinitiv consensus and also the $ 1.67 expected from the Bloomberg consensus. On the earnings front, Tesla did therefore better than forecasts.
However, the turnover has disappointed, while climbing 57% to $ 13.76 billion, also a record level but lower – but not by much in relative terms – compared to the $ 13.91 billion forecast by the Bloomberg consensus.
Another positive note came from operating margin, which rose in the third quarter to 14.6%, from 11% in the second quarter and up from 9.2% in the same period last year.
Tesla balance sheet: all-time record also for the operating margin
In the letter sent to shareholders, Tesla emphasized this point above all:
“Our operating margin has reached an all-time record, at a time when we continue to reduce costs at a faster rate than the declines in average selling prices ”.
Also i gross margins of the automotive business, that derive from Tesla’s core business, that is from the sale of electric vehicles: the parameter rose from 25.8% in the second quarter to 28.8%: it must be said that this number does not take into account the positive impact of green credits that the group sells to other car manufacturers; credits which stood at $ 279 million in the quarter, down from $ 397 million in the third quarter of 2020.
At record levels too deliveries of electric cars related to the period, the data for which had been released earlier this month, when Tesla announced that it had delivered more than 241,000 electric cars worldwide, the highest value in its history on a quarterly level. The number led to the total amount of cars delivered since the beginning of the year to 627,500 units, already above the deliveries of almost 500,000 vehicles that affected the whole of 2020.
In this regard, Tesla has confirmed the previous guidance of an average growth in deliveries, over a multi-year horizon, and on an annual basis, equal to + 50%.
Deliveries in the third quarter saw the protagonists above all Model 3 and Model Y vehicles, which have more affordable prices than other flagships of the group: together, these models accounted for total deliveries (241,000) for 232,000 units. Tesla said, among other things, that the average selling price (ASP) of its vehicles has fallen by 6% on an annual basis, “due to the continuous shift of the product mix towards vehicles at lower prices”.
Tesla’s results are impressive, considering that the entire global auto industry is suffering from the chip crisis, or the consequences of the scarcity, on the market, of the semiconductors necessary for the production of vehicles.
Tesla: record deliveries of cars to make GM pale
Record car deliveries in the third quarter, up over 70% year-on-year, dwarf the results of many other auto giants. General Motors for example, in the third quarter, it delivered 446,997 vehicles, down 32.8% year on year, due to the effects of the chip crisis, which forced the giant to stop production at some of its plants; sales of American Honda they fell by 10.9% year on year, worse than the limited decline of -6.7% expected by analysts.
Not that Tesla was completely unharmed. In fact, the letter to the shareholders states that “several challenges, including the shortage of semiconductors, congestion in ports and blackouts they have conditioned – and continue to do so – our ability to guarantee the full speed of our factories ”. And yet, “we believe our supply chain, and new engineering and manufacturing teams are handling these global challenges with ingenuity, agility and flexibility without parallel in the automotive industry “.
The budgetary results prove this. And congratulations in this sense had arrived in recent days from the same Herbert Diess, President of Volkswagen AG who, with a post on LinkedIn, had written: “An example of Tesla’s speed: it managed the chip crisis very well”. The reason? Diess says: “In the space of 2-3 weeks he developed a new software that allows you to use different chips. Impressive”.
The market must also have noticed this, given that Tesla stock has continued to rise in the last period, with a comeback up to $ 870.11, up almost + 55% compared to the low of March 8, at $ 563. . The comeback made Tesla the sixth largest US company listed on the stock exchange, well ahead of Warren Buffett’s holding company, Berkshire Hathaway.
The analyst remains optimistic Daniel Ives at Wedbush, who had written days ago that the “green wave” would take the stock “to higher values despite the short-term crisis in the chip supply”. For Ives, the same publication of the financial statements, which took place yesterday, would have represented “another positive factor”.
There is, however, a problem with all of this, highlighted by a recent Bloomberg article. At the moment Tesla stock is trading 120 times 12-month forward earnings: basically, TSLA is the most expensive stock in the NYSE + FANG Index, which is also made up of Nvidia, Alphabet, Apple, Twitter, Facebook, Amazon.com, Netflix Inc., Alibaba and Baidu. And that’s not really good news for Elon Musk.
Among the other balance sheet items that will be particularly monitored by investors is that relating to Bitcoin which, in the third quarter, cost Tesla a $ 51 million devaluation. The giant has kept its investment in the world‘s number one cryptocurrency unchanged, in the spotlight in the last few hours for the new record, tested at a value above $ 66,900, compared to the previous record of $ 64,899 in mid-April.
Bitcoin fever has re-exploded due to several factors including, without a shadow of a doubt, the launch on the NYSE, two days ago, of the first Bitcoin ETF and the bullish comments that arrived yesterday since legendary trader Paul Tudor Jones.