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Tesla revenue up 42%, Ryanair rebounds, Lockheed targets cut

  • In the second quarter of 2022, Tesla reported adjusted earnings of $2.27 per share on $16.93 billion in revenue.
  • Inflation and increased competition for EV components lower automotive margins.
  • Ryanair Reports 170 million euro first-quarter profit.
  • Ryanair compared to 243 million in the pre-COVID Q1 of 2019.
  • Lockheed Martin Corp cut its 2022 per share targets, despite surpassing the first-quarter target.

Tesla released its earnings, and the results caused the stock to rise somewhat after trading hours.

Analysts estimates that earnings per share (EPS) were $2.27 (adjusted), compared to the $1.81 predicted. 

According to Analysts, revenue was $16.93 billion compared to the $17.1 billion anticipated.

Due to inflation and increased competition for battery cells and other components used in electric vehicles, the automotive gross margin decreased to 27.9 percent from 28.4 percent a year ago and 32.9 percent last quarter. 

The company’s overall revenues were $14.6 billion, of which $1.47 billion came from services and other revenue and $866 million from the energy division.

According to the company’s shareholder deck, it generated $344 million in revenue from automobile regulatory credits in the second quarter. 

That represents a $10 million or about a 3% drop from the same time in 2021.

Tesla’s new factory outside of Berlin produced more than 1,000 cars per week in June, according to CEO Elon Musk, who also predicted that Austin, Texas’s new factory, will soon reach the same production milestone.

Tesla reported 709 shop and service sites for the quarter and 3,971 Supercharger locations (with 36,165 total Supercharger connections) in the second quarter, indicating that its charging infrastructure has expanded more rapidly than its retail and service locations. 

These figures reflected a 19 percent increase in retail and service center locations and a 34 percent increase in charging locations year over year.

The business provided minimal information on its purchases of bitcoin and sales of it, noting, 

“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency. Conversions in Q2 added $936M of cash to our balance sheet.”

The company’s cash and cash equivalents climbed by $847 million overall during the quarter. 

When Tesla declared in early 2021 that it had bought $1.5 billion worth of bitcoin, it caused a stir among cryptocurrency supporters.

“The reason we sold a bunch of our bitcoin holdings was that we were uncertain as to when the covid lockdowns in China would alleviate so it was important for us to maximize our cash position.” 

Musk explained.

 “This should not be viewed as some judgment on Bitcoin,” he continued. 

Musk and CFO Zachary Kirkhorn both affirmed that none of Tesla’s dogecoin had been sold.

Tesla has maintained its soft estimate for “50 percent average annual increase in vehicle deliveries” over a “multi-year horizon” with two additional plants already operational in Texas and outside of Berlin, Germany.

Inflation Uncertainty

The aggressive Russian invasion of Ukraine and the Covid outbreaks in China worsened the already existing shortages of semiconductors, parts, and other supply chain issues.

In the second quarter of 2022, Tesla’s Shanghai manufacturing was forced to halt or reduce production due to covid limits briefly.

Musk said earlier this month in a tweet that if inflation “calms down,” 

Tesla may lower the price of its electric vehicles.

On Wednesday’s earnings call, Tesla CFO Zachary Kirkhorn said, 

“Austin and Berlin ramp inefficiencies will continue to weigh on our margins for the balance of the year. However, the impact should reduce as we increase ramp.”

“I think inflation will decline towards the end of this year,” 

Musk said optimistically but cautioned investors to take that prediction with a grain of salt. 

Ryanair Reports Near Pre-COVID Profits in the First Quarter of 2022

In spite of exceeding first-quarter profit projections, Ryanair said on Monday that recovery to profitability levels prior to COVID was not certain for this year.

The 170 million euro ($174 million) after-tax profit for the quarter ending in June beat analyst projections of 157 million euros but fell far short of the 243-million-euro profit in the same period of 2019.

The year’s most profitable quarter—July through September—saw fares that were low-double-digit percentages higher than in 2019. 

This is according to Chief Executive Michael O’Leary. 

For the entire fiscal year that ends on March 31, 2023, he said, it is hard to foresee earnings because of the unpredictability of fuel prices, COVID-19, and geopolitical threats.

O’Leary stated in a video presentation that Ryanair expects profitability and margins to return to levels prior to COVID, but the firm is unsure if that will be accomplished in the current or following fiscal year.

In contrast to the 165 million passengers it expects to carry this year, Ryanair reported a 1-billion-euro profit in its pre-COVID financial year 2020 with 148 million passengers.

“Any guidance is subject to a very rapid change from unexpected events which are well beyond our control during what remains a very strong but still fragile recovery,” 

O’Leary said

Lockheed Martin Reviews 2022 Financial Forecast After Second Results

After F-35 fighter jet sales declined amid pandemic-related challenges, as well as losses at its venture arm and other one-time expenses piled up, American weapons manufacturer Lockheed Martin Corp cut its 2022 revenue and profits per share targets.

The Corporation reported second-quarter 2022 net sales of $15.4 billion last week, down from the first quarter 2021’s $17.0 billion. 

In comparison to the second quarter of 2021, when net earnings were $1.8 billion, or $6.52 per share, the second quarter of 2022 saw net earnings of $309 million, or $1.16 per share. 

In the second quarters of 2021 and 2022, cash from operations totaled $1.3 billion. In the second quarters of 2021 and 2022, free cash flow totaled $1.0 billion.

The F-35’s manufacturer, Aeronautics, reported a 12 percent decline in quarterly sales to $5.8 billion.

In an interview with Reuters, Chief Financial Officer Jay Malave stated that supply chain concerns had broadly affected the aeronautics section and that the termination of certain federal financing had harmed the program.

Lockheed and the Pentagon reached a three-year deal for F-35s on Monday, adding extra funds to the program.

Lockheed had previously projected full-year earnings per share of $26.70; on Tuesday, it slashed that aim by 19% to $21.55 and decreased its revenue outlook by 1.1 percent from $66 billion to $65.25 billion. 

Lockheed has not changed its estimates for operating profit in the business division.

Malave claimed that problems caused by the COVID-19 breakouts in the winter and early spring had impacted Lockheed and its suppliers, halting production.

In addition to the pandemic and workforce-related delays, Malave claimed that fresh allied interest in F-16s had recently increased, going from 300 units to as many as 500.

According to Refinitiv statistics, Lockheed’s earnings per diluted share for the quarter came in at $1.16 compared to analysts’ expectations of $1.71.

One-time expenses, such as a $0.40 per share mark-to-market loss at the company’s venture firm and a $0.10 per share charge for debt refinancing, however, according to Malave, were a hindrance for the Bethesda, Maryland-based corporation.

In the same quarter a year ago, the Missiles and Fire Control unit, which manufactures the High Mobility Artillery Rocket System (HIMARS), reported profits of $418 million.

Malave stated that as demand for these systems rises in response to Russia’s invasion of Ukraine, the corporation is considering raising production rates at both its Patriot Advanced Capability-3 (PAC-3) factory and for HIMARS.

He did warn that it would take time for the increased interest in the products to translate into sales.

“I think the things to look for, for Lockheed Martin, will be the orders activity as well as our backlog growth over the next two years. And then that will convert into revenues beyond that.”

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  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.

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