Tesla Probably Had Weakest Quarterly Profit, Revenue Gains in Three Years

Carmaker beat production estimates but came up short of expected deliveries as demand waned

Two men stepping out of a Tesla showroom

Spencer Platt / Getty Images

Key Takeaways

  • Tesla is expected to report adjusted EPS of $1.19 for the fourth quarter of 2022, compared with $0.85 for the prior-year quarter.
  • Revenue likely climbed about 38% to $24.4 billion.
  • Tesla said it delivered over 405,000 vehicles in the last quarter, missing analyst estimates.
  • Tesla was the worst-performing stock in the S&P 500 Index last year due to weakening demand, supply chain issues, and potential legal issues.

Elon Musk's Tesla Inc. (TSLA), last year's worst-performing stock in the S&P 500, may underpin that performance by saying this week that fourth-quarter profit rose at the slowest pace in three years amid weaker demand and logistical issues.

Adjusted earnings per share (EPS) likely rose 41% to $1.19 from a year ago, according to estimates from Visible Alpha. Revenue probably increased almost 38% to $24.4 billion, the slowest pace of growth since mid-2020. Tesla announces results after markets close on Jan. 25.

The electric vehicle (EV) company dealt with a slew of internal issues in recent months including COVID-related logistics trouble and supply chain problems. Musk, the CEO, has stirred controversy with his takeover of Twitter, prompting some Tesla shareholders to call for his ouster. Musk also faces scrutiny from regulators, including a possible trading probe over shares he sold in December and a trial over allegations that he lied about potential plans to take Tesla private in 2018.

Externally, increased competition from rival EV makers, a cooling economy, and tepid demand among Chinese customers prompted Tesla to slash prices on several models in early January in a bid to win business. What's more, Tesla announced at the start of the year that it came up short of analyst estimates for new cars delivered in the last quarter.

Tesla shares plunged by almost two-thirds last year. A modest improvement early in 2023 brings Tesla's stock to a one-year drop of about 60%, compared with a 26% decline for the S&P 500 Consumer Discretionary Index.

One-Year Total Return for S&P 500 Consumer Discretionary Index and Tesla
Source: TradingView.
Tesla Key Stats
  Estimate for Q4 FY 2022 Actual for Q4 FY 2021 Actual for Q4 FY 2020
Adjusted Earnings Per Share ($) 1.19 0.85 0.27
Revenue ($B) 24.4 17.7 10.7
Total Car Production (K) 439.7 (Actual) 305.8 179.8

Source: Visible Alpha

The Key Metric: Vehicle Production

Vehicle production is a key metric for Tesla, as it needs to expand production to lift revenue and profit. As manufacturing increases, Tesla will need to address supply chain issues and new-vehicle transportation capacity.

Tesla's vehicle production growth has slowed in the last several quarters. Though the company said in early January that it produced over 439,700 cars in the last three months of 2022, coming up ahead of a predicted 435,000.

Article Sources
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  1. Reuters. "Tesla deliveries miss estimates due to logistical issues, slowing demand."

  2. Companiesmarketcap.com. "Largest automakers by market capitalization."

  3. Visible Alpha. "Financial Data."

  4. Tesla. "Tesla Vehicle Production & Deliveries and Date for Financial Results & Webcast for Fourth Quarter 2022."

  5. Fortune. "‘Tesla has no working CEO’: As stock drops 61% from its peak, a major Tesla shareholder calls for Elon Musk’s ouster."

  6. Reuters. "Musk trial: lawyers clash over whether CEO lied in 2018 Tesla tweet."

  7. Bloomberg. "Tesla Delivers Record 405,278 Cars in Quarter But Misses Target."

  8. The Wall Street Journal. "Tesla Stock Fell 65% in 2022, Its Biggest-Ever Annual Decline."

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