The quarter was challenging, but “we have the potential to break records in the second half of the year,” barring force majeure and other issues beyond the EV maker’s control, Chief Executive Elon Musk said on a call after the results. “It’s been supply chain hell for several years now.” Tesla TSLA, +0.80% said it earned $2.3 billion, or $1.95 per share, in the second quarter, compared with $1.1 billion, or $1.02 per share, in the second quarter of 2021 Adjusted for one-time items, the company earned $2.27 a share. Sales rose 42 percent to $16.9 billion from $12 billion a year ago, thanks to increased sales, higher average selling prices and growth in other parts of the business, Tesla said. Analysts polled by FactSet had expected Tesla to report adjusted earnings of $1.81 a share on sales of $16.5 billion. “From our perspective, this was probably Tesla’s most impressive quarter in years, considering the daunting challenges it faced,” which included supply chain issues, the COVID-19 shutdown in Shanghai and start-up costs in Austin and Berlin, CFRA analyst Garrett Nelson told MarketWatch. . “The guidance that the Fremont and Shanghai plants both achieved their highest monthly output and focused on breaking records in the second half of 2022 was even more music to the bulls’ ears,” Nelson said. Tesla said it faced “challenges” with shutdowns and limited production in Shanghai, but ended the quarter with “the highest month of vehicle production in our history.” Headwinds also included higher raw material and logistics costs, including costs to expedite parts, the impact of a stronger dollar and a “bitcoin impairment,” which the company did not specify. Tesla ended the quarter with $18.9 billion in cash and cash equivalents. He said he converted about 75% of the bitcoin BTCUSD, +1.67% purchases into what he called “fiat currency.” The conversions in the quarter added $936 million in cash to the balance sheet, the company said. Tesla’s free cash flow was “a bit soft” compared to expectations, “but understandable given the supply chain disruption,” RBC’s Joseph Spak said in a note after the results. The second quarter “appears to be the near-term nadir with (Tesla) focused on “a record second half of 2022,” Spak said. Shares rose slightly in after-hours trading immediately after the report. The stock ended the regular trading day up 0.8%. Heading into the results, Wall Street worried the second quarter would be difficult thanks to continued supply chain disruptions, slower production ramps at Tesla’s factories in Austin, Texas, and Berlin, Germany, and pandemic-related shutdowns that crowd out the Tesla factory in Shanghai. In a letter to shareholders accompanying the results, Tesla appeared to moderate expectations for production ramps in Austin and Berlin. The pace of production at the two plants “will be affected by the successful introduction of many new products and production technologies in new locations and ongoing challenges related to the supply chain. Factory ramps take time,” and these two will be no different, Tesla said. The company said it is “making progress” on the Cybertruck, its electric truck, which is to be built in Austin after ramping up Model Y production there. On the call, Musk reiterated that Tesla was on track to roll the vehicle off the production line in mid-2023. Tesla earlier this month reported a quarterly drop in deliveries, its sales representative, prompting some analysts to lower their expectations for the EV maker’s quarter. Tesla shares have lost 30% this year, compared with about 17% losses for the S&P 500 SPX, +0.59% .
