Elon Musk’s Tesla reports decrease in profits, beating estimates, and sells off most of its bitcoin
Tesla faced plant shutdowns in Shanghai and ongoing supply chain issues this quarter
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Tesla on Wednesday announced that its second-quarter profits have fallen 32% from the previous quarter, but overall earnings were stronger than expected even as the electric car manufacturer faced an uphill battle with plant closures in Shanghai and supply shortages.
In an earnings call, the company said it netted $2.26 billion in profit for the quarter and stuck with a prediction of 50% annual vehicle sales growth over the next few years.
FILE: A sign bearing the company logo outside a Tesla store in Cherry Creek Mall in Denver is seen here on Feb. 9, 2019. (AP Photo/David Zalubowski, File / AP Newsroom)
"Q2 was a unique quarter for Tesla due to a prolonged shutdown of our Shanghai factory. But in spite of all these challenges, it was one of the strongest quarters in our history," Musk said in a statement.
The EV maker posted an adjusted profit of $2.27 per share versus analysts' consensus estimates of $1.81.
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Its automotive gross margin fell to 27.9%, down from a year earlier and the preceding quarter, amid inflationary pressure. Revenue was $16.93 billion, beating estimates of $16.54 billion.
Tesla’s sales from April through June fell to 254,000 vehicles – their lowest quarterly level since last fall. But the company predicted record-breaking production in the second half and said that in June it had the highest production month in hits history.
FILE PHOTO: A Tesla vehicle drives past Tesla's primary vehicle factory after CEO Elon Musk announced he was defying local officials' coronavirus disease restrictions by reopening the plant in Fremont, California. (REUTERS / Reuters Photos)
The earnings defied Wall Street expectations after the lower sales figures and Musk’s tweet about laying off 10% of the company’s workforce due to fears of a recession.
Shares of Tesla were up about 1% in after-hours trade, but still remain down around 40% since their peak in November.
The company also said it had converted 75% of its bitcoin investment to government currency during the quarter, adding $936 million in cash to its balance sheet. It spent $1.5 billion on the investment last year, but it was unclear how much it has lost.
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The earnings call comes as Musk finds himself in a legal battle over reneging on his $44 billion deal to acquire Twitter. The social media giant is trying to force Musk to follow through on his April promise to buy the company, and Twitter wants it to happen quickly because they say the ongoing dispute is harming its business.
The Associated Press contributed to this report.