Tesla (NASDAQ:TSLA) is poised to report its second-quarter earnings after markets close today. Following a challenging quarter that saw the company’s primary vehicle export hub, Gigafactory Shanghai, get halted for over three weeks, all eyes are now on the company’s Q2 results to see if it could maintain its profitability.
Tesla is currently facing a number of headwinds. Its CEO, Elon Musk, is involved in what is becoming a bitter legal battle against social media company Twitter. Questions also remain about Tesla’s Full Self-Driving program, especially after former AI Director Andrej Karpathy’s departure from the company.
Amidst these challenges, analysts currently expect an increase in earnings per share and revenue, though at a significantly slower pace than in previous quarters. This is hinted at by the company’s Q2 2022 vehicle delivery and production results. According to Tesla, it produced 258,580 vehicles in Q2, up more than 25% year-over-year. It also delivered 254,695 vehicles in the second quarter.
Tesla’s growth in Q2 was significant, but it also represented the slowest growth rate of the company’s quarterly vehicle production since Q2 2020, at the start of the pandemic.
Tesla’s earnings per share has performed well during the pandemic. Between Q1 2020 and Q1 2022, Tesla’s EPS at least doubled YoY in every quarter. It even surged by over 300% YoY in Q1 2021, and 232.2% in Q2 2021, according to an Investopedia report. For Q2 2022, analysts are expecting a significantly more tempered increase, with estimates suggesting a 26.6% increase in EPS for Q2 2022.
Tesla’s revenue has been impressive over the years. In the past nine quarters, Tesla has reported just one period of revenue decline, in Q2 2020. Apart from this, revenue growth has ranged from 31.8% to 98.1% in Q1 2020 and Q2 2021, respectively. Analysts currently expect Tesla’s revenue to grow 41.1% in Q2 2022, which is less than half the pace of the same quarter last year.
Overall, analysts expect Tesla to post adjusted earnings per share of $1.83 and revenue of $16.9 billion. Whether these estimates would be exceeded would be revealed later today.
Disclaimer: I am long TSLA.
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