Saudi Press

Saudi Arabia and the world
Saturday, Feb 22, 2025

Tesla cracks the $1 billion profit mark

Tesla cracks the $1 billion profit mark

Tesla posted record profits Monday - its third record quarter in a row - as its adjusted earnings reached the $1 billion mark for the first time.
The company recorded $9 billion in total revenue. That was slightly lower than fourth quarter sales but up 75% from the year-earlier period.

Revenue was partly held back as it stopped building its two most expensive models, the Model S and Model X, during the quarter, as it prepared to roll out new versions of those vehicles and dealt with a shortage of computer chips that has dogged the entire auto industry.

But Tesla said it weathered the chip shortage "in part by pivoting extremely quickly to new microcontrollers, while simultaneously developing firmware for new chips made by new suppliers." CEO Elon Musk told investors later Monday that the chip shortage was "a huge problem" for Tesla, and that the company "had some of the most difficult supply chain challenges that we've ever experienced."

Shares of the company fell 3% in premarket trading.

It said its deliveries of the new Model S "should start very shortly." But that was the same prediction made when it reported fourth-quarter results three months ago. Musk again seemed more cautious than the company's earnings statement, saying that it had experienced "just a lot of issues" with the new Model S and Model X. He said deliveries of the Model S would resume deliveries "probably next month," and that volume deliveries of the two cars would not resume until the third quarter.

The company was also helped by an investment in bitcoin. The company had previously disclosed it invested $1.5 billion in bitcoin in the quarter with some of its cash on hand. It said the sale of bitcoin during the period resulted in a $101 million profit.

It wasn't long ago that Tesla was losing money most quarters and in danger of running out of cash. It didn't report consecutive profitable quarters until the end of 2018, and it proceeded to lose money again over the first half of 2019.

But it has been profitable since the third quarter of 2019, and the stock has soared since then, climbing 1349% since it reported that third quarter profit in 2019. It is one of the nation's most valuable companies and its stock is worth more than the combined value of the world's seven largest automakers.

And its adjusted earnings in the first quarter could top that of some established automakers, such as Ford (F), according to analysts' forecasts, even though Ford sells far more cars.

Musk said the company should be able to stick to its target for better than 50% growth in sales this year, which would take sales over the 750,000 mark, and that it would be able to continue 50% sales growth annually beyond that. It has plants under construction in Texas and Germany, although he cautioned Monday that he expects only initial limited production from those factories this year. He said the two plants won't have volume production until 2022.

Musk and other Tesla executives defended the company's Autopilot feature that has been the focus of a recent fatal crash of a Tesla in a Houston suburb in which police said that investigators were certain that no one was in the driver's seat at the time of the crash.

Lars Moravy, Tesla's vice president of vehicle engineering, said the company is working with federal safety investigators and local police. He said that because the steering wheel was "deformed" it is now believed there was in fact someone in the driver's seat at the time of the crash. And he did caution "further investigation of the vehicle and accident remains."

Musk said that the company is making great progress on developing fully self driving cars, and the he believes it will be the key factor distinguishing it from other companies.

"Right now, people think of Tesla as a car company or energy company. I think long term, people will think of Tesla as much as an AI [artificial intelligence] robotics company as we are a car company or an energy company," he said. "I think we are developing one of the strongest hardware and software AI teams in the world."

Some critics of Tesla have questioned the strength of its earnings, pointing to the fact that its "adjusted" earnings excludes some costs such as stock compensation.

But many companies report adjusted earnings as well as a stricter version of net income that follow generally accepted accounting principles, or GAAP results. And even under those GAAP rules Tesla reported net income of $438 million, itself a record.

But the critics again say Tesla is losing money on actually selling cars and solar panels, its other primary business, and that it depends on selling $518 million in regulatory credits that other automakers need in order to comply with environmental rules, as well as the profit it reported on bitcoin trades.

The revenue and adjusted earnings both topped forecasts of Wall Street analysts surveyed by Refinitiv, although on a GAAP basis its net income fell a bit short of expectations.
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Saudi Arabia and the United States Strengthen Ties Amid Global Developments
Saudi Arabia Hosts Global Conference to Promote Islamic Unity
The Impact of Artificial Intelligence on Education and Child Development
Saudi Arabia Announces Competition for Best Founding Day Outfits
Saudi-EU Food Security Officials Hold Talks to Strengthen Collaboration
Putin Expresses Gratitude to Saudi Crown Prince for Hosting US-Russia Talks
UK and Saudi Arabia Enhance Collaboration in Innovation and Technology
Denmark's Embassy in Riyadh Showcases Danish Cuisine with Saudi Influence
Saudi Artist Salman Al-Amir Unveils 'Tafawut' Exhibition in Riyadh
Saudi Arabia Offers Condolences to Kuwait Following Military Exercise Fatalities
Saudi Ministry of Islamic Affairs Completes Ramadan Preparations in Madinah
Etidal Secretary-General Hosts UN Counter-Terrorism Director in Riyadh
ADNOC Drilling Targets Over $1 Billion in Investments for 2025 Amid Gulf Expansion Plans
Derayah Financial Achieves Remarkable Growth in Saudi Brokerage and Asset Management
Saudi Arabia Shortlists 30 Firms for Mining Licenses in Eastern Province and Tabuk
Saudi Foreign Minister Engages Counterparts at G20 Meeting in Johannesburg
Oil Prices Decline Amid Rising US Inventories
Saudi Arabia's NDMC Plans Green Bond Issuance by 2025
Moody’s Affirms Egypt’s Caa1 Rating Amid Positive Economic Outlook
Oman and Saudi Arabia Strengthen Economic Ties with New Agreements
Saudi Arabia Investments Propel Expansion of Qurayyah Power Plant
Saudi Capital Market Authority Advances SPACs and Direct Listings
Global Energy Leaders Gather in Riyadh for Symposium on Energy Outlooks
Al-Ahsa Region Sees 500% Growth in Tourism as Saudi Arabia Prioritizes Development
Saudi Arabia Advances Entrepreneurial Ecosystem in Al-Ahsa with New Agreement
King Salman Approves Official Saudi Riyal Symbol
Saudi Credit Card Lending Reaches $8.4 Billion Amid Digital Payment Expansion
King Salman Approves Official Symbol for Saudi Riyal
Putin Thanks Saudi Crown Prince for Facilitating U.S.-Russia Discussions
Saudi Foreign Minister Attends G20 Meeting in Johannesburg
Saudi Arabia Prepares for Nationwide Founding Day Celebrations
Inauguration of Hira Park and Walkway Enhances Jeddah's Urban Landscape
Crown Prince Hosts Leaders for Informal Meeting in Riyadh Amid Gaza Rebuilding Plans
Saudi Official Highlights Achievements and Media's Role in National Transformation
Three Expatriate Women Arrested for Prostitution in Riyadh
Saudi Arabia's Diplomatic Evolution Highlighted at Saudi Media Forum
Healthy Eating and Preparation Essential for Ramadan Fasting
Saudi Arabia and Japan Forge Sustainable Textile Partnership
Advanced Limb Surgery Restores Mobility in Pediatric Cancer Patient
Jeddah Event Explores AI's Role in Boosting Saudi Arabia's SME Sector
UN Representative Highlights AI's Role in Perpetuating Gender Stereotypes
Saudi and Jordanian Leaders Discuss Enhanced Security Cooperation in Amman
Saudi British Society Honors Cultural Bridge-Builders at London Gala
Saudi Media Forum 2025 Explores AI's Role in Modern Journalism
Saudi Arabia's Saqer Al-Moqbel Appointed as WTO General Council President for 2025–2026
Saudi Deputy Ministers Engage in Diplomatic Discussions with U.S. and Dutch Officials in Riyadh
Saudi Arabia to Launch Iftar Program in 61 Countries During Ramadan
Saudi Visitors Expected to Spend £942 Million in UK During 2025
Saudi Arabia Gifts Kaaba's Kiswah to Uzbekistan's Center of Islamic Civilization
Digital Cooperation Organization Concludes Fourth General Assembly with Multiple Agreements
×