Tesla said on Monday it made a net income of $438 million in the first quarter, driven by strong sales of its electric cars and SUVs. The company also announced earnings of 93 cents per share and $10.39 billion in revenues. This is the seventh-straight profitable quarter reported by the Elon Musk company.
Tesla's earnings per share also beat the Wall Street's estimates of 75 cents per share. The pioneering carmaker, which also makes solar panels and batteries, said its first quarter revenue rose 74 percent. Tesla had reported only US$16 million in the first quarter of 2020.
However, Musk and CFO Zachary Kirkhorn said supply chain issues will pose challenges for Tesla this year. In an earnings call, Musk announced that new Model S sedans from Tesla will be rolled out starting in May 2021.
Tesla said it expects vehicle deliveries to grow on average by 50 percent per year over the long term. "The rate of growth will depend on our equipment capacity, operational efficiency and capacity, and stability of the supply chain," the company said.
Analysts said a host of factors drove Tesla's good show in the first quarter. "Higher regulatory credits, lower taxes, and bitcoin sales buoyed financial results. Back these out, and it was a large miss," Roth Capital Partners analyst Craig Irwin said, according to Reuters.
Tesla also said it trimmed its bitcoin holdings. The company, which had famously invested $1.5 billion in bitcoin said it cut its position by 10 percent during the first quarter.
"We do believe long term in the value of bitcoin .. It is our intent to hold what we have long term and continue to accumulate bitcoin from transactions from our customers as they purchase vehicles," said CFO Zachary Kirkhorn. Tesla's proceeds from sales of digital assets was $272 million with a $101 million "positive impact".
Tesla also said it was able to circumvent the global chip shortage, which has negatively affected carmakers around the world. It made this possibly by pivoting to new chips while also making software for chips made by new suppliers. Tesla faced "some of the most difficult supply chain challenges," Musk added. "We're mostly out of that particular problem," he asserted.
The company said its cash position dropped by US$2.24 billion in the quarter to US$17.14 billion. This was mainly due to bitcoin purchases and $1.2 billion in debt and finance lease payments, the company said.
Tesla shares were down about 2 percent in extended trading after the results.