Tesla Service, image Courtesy of Tesla, Inc.
Nicolas Caballero's picture

Tesla's Next Quarterly Earnings Call Set To Be Outstanding Again

Tesla posted record revenue and profits in the third quarter of 2021. The record results were driven by improved gross margins of 30.5% on its automotive business and 26.6% overall, both of which were records for at least the last five quarters. It seems the next earnings call will also be record-breaking.

The company’s stock dropped by 1.5% after hours back in October, as per CNBC's report. The results were: earnings per share (adjusted): $1.86 vs $1.59 expected per Refinitiv; revenue: $13.76 billion vs $13.63 billion expected per Refinitiv.

The company reported $1.62 billion in (GAAP) net income for the third quarter, the second time it had surpassed $1 billion. In the year-ago (third) quarter, net income was $331 million. The record results were driven by improved gross margins of 30.5% on its automotive business and 26.6% overall, both of which were records for at least the last five quarters. Automotive revenue rose to $12.06 billion and costs of automotive revenue amounted to $8.38 billion for the quarter, as per CNBC's report.

Tesla Service, image Courtesy of Tesla, Inc.

Now, for this coming quarterly call, Elon Musk stated that "… we will still have quite a big wave of deliveries in the last few weeks of December, as we don't yet have high volume production in Europe or Texas, which means a lot of cars on boats from China to Europe and on trucks/rail from California to the East Coast arriving late in the quarter, but this is nonetheless the right time to start reducing the size of the wave on favor of a steadier and more efficient pace of deliveries. The right principle is: take the most efficient action, as though we were not publicly traded, and the notion of end of quarter didn't exist."

Soocial media users (@Alex___VA) reacted saying "… That’s right. When survival of @Tesla depended on quarterly earnings (ability to raise capital) delivery sprints, though costly, were a necessary evil. Now, back to first principles, efficiency everywhere."

Other users, like @mysticwanderer5 reacted saying "… Right! Thinking from first principles. Work as if you are competing with your old self."

Going back to last quarter’s call, and always as per CNBC's report, Tesla also generated $806 million in revenue from its energy business, which combines solar and energy storage products, and $894 million in services and other revenue, which includes vehicle maintenance and repairs, auto insurance and sales of Tesla-branded merchandise among other things Tesla has disclosed in past financial filings. For its energy and storage business, costs of revenue rose to the highest number in the last five quarters to $803 million during the third quarter.

Tesla Model 3, Courtesy of Tesla Inc.

As for this quarter, Model Y and Model 3 delivery numbers are quite high, based on the latest information from Giga Shanghai and from the other Tesla factories. Based on this feedback, it will be really interesting to see what surprises Elon Musk is preparing for next quarterly earnings call, apart from what the numbers will be telling us straightforward.

What do you think? Please let us know in the comment section below.

All images courtesy of Tesla Inc.

Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.

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