Tesla Q4 2021 Earnings: Beats Expectations

Tesla Announces Fourth Quarter and Full-Year 2021 Results

Tesla, the U.S.-based electric vehicle manufacturer, has released its financial performance data for the fourth quarter of 2021 and the entirety of the calendar year. The report was made public earlier today.

Q4 2021 Financial Highlights

During the last quarter of 2021, Tesla achieved a total revenue of $17.72 billion. A significant portion of this revenue, approximately $16.0 billion, was derived from the sales of its vehicles.

The company’s net income for Q4 reached $2.32 billion, translating to earnings per share of $2.05. Adjusted earnings per share were reported at $2.54.

Exceeding Analyst Expectations

Prior to the release, financial analysts had predicted a total revenue of $16.35 billion and an adjusted earnings per share of $2.26 for the fourth quarter. Therefore, Tesla’s actual performance surpassed these projections in both revenue and profitability.

Stock Market Reaction

Following the earnings announcement, Tesla’s stock experienced fluctuating activity in after-hours trading. Initially, the share price saw a slight decline, but it subsequently recovered and began to increase as the report was analyzed.

The company’s ability to deliver strong financial results continues to be a key factor influencing investor sentiment.

Tesla's Strong Fourth-Quarter Performance

Tesla’s automotive performance during the fourth quarter demonstrates considerable strength. The company generated approximately $16.0 billion in total revenue from vehicle sales, exceeding both the $12.06 billion reported in the previous quarter and the $9.31 billion from the same quarter last year.

Analysts closely following Tesla’s financial reports are particularly interested in the contribution of regulatory credits to the quarter’s revenue. These credits have occasionally been highlighted by critics as potentially inflating the company’s reported figures.

Notably, the fourth quarter of 2021 saw Tesla record its second-lowest revenue from regulatory credits within the past five quarters.

A positive trend for the automaker is that its automotive gross margin did not decline alongside revenue growth. Instead, it increased to 30.6%, marking a five-quarter high and a rise from 24.1% in the year-ago quarter.

Further key figures include a free cash flow of $2.78 billion for the quarter, establishing a new record based on available data. Additionally, the company’s total cash and cash equivalents surpassed $17 billion.

Concluding the quarterly overview, automotive revenue accounted for over 90% of Tesla’s total revenue.

A Review of Tesla's Performance in 2021

Overall, 2021 represented a period of substantial growth for Tesla. The company experienced approximately a 71% increase in revenue, reaching a total of $53.82 billion. This growth translated into an adjusted EBITDA of $11.62 billion and a net income of $5.52 billion.

Considering Tesla’s robust profitability and strengthening cash reserves, speculation arises regarding a potential future dividend. The company’s substantial cash generation, even when accounting for capital expenditures, suggests the possibility.

Stock Performance Following the Report

Despite the positive financial results, Tesla’s stock price has not demonstrated significant movement. This appears to be due to the fact that the reported outcomes largely aligned with pre-existing market expectations, and were therefore already factored into the share price.

Currently valued at approximately $937 per share, Tesla’s market capitalization exceeds $941 billion, according to data from Yahoo Finance.