Tesla closes 2021 on a high note by besting expectations in Q4

U.S. electric vehicle company Tesla reported its fourth-quarter and calendar-year 2021 results this afternoon. In the final three months of 2021, Tesla generated $17.72 billion in revenue, $16.0 billion of which came from its vehicle business. From that total, Tesla’s Q4 saw net income of $2.32 billion and earnings per share of $2.05. On an adjusted basis, the company earned $2.54 per share.

Analysts had expected the company to report $16.35 billion in total revenue and $2.26 in adjusted per-share profit in the fourth quarter of 2021. In basic terms, Tesla outperformed on revenue and profit estimates.

Shares of the company are mixed in after-hours trading, initially falling a few points but rising by the time this story was written.

Inside the quarter

Fourth-quarter automotive results at Tesla appear strong. The company’s nearly $16.0 billion in total car revenue bested both the preceding quarter’s tally of $12.06 billion and its year-ago comp of $9.31 billion.

For those of you versed in Tesla results, you’ll be curious what portion of the quarter’s revenues came from regulatory credits, which critics of the company have cited here and there as indication that its numbers were slightly puffed-up. In the fourth quarter of 2021, Tesla reported its second-smallest regulatory credit haul in the last five quarters.

Even better for the car company, Tesla’s automotive gross margin did not fall as its revenues from the category grew. Instead, it ticked up to what is at least a five-quarter high at 30.6%, up from 24.1% in the year-ago period.

Other numbers of note include that Tesla’s free cash flow was $2.78 billion in the quarter, another record in the periods of data shared, and the company’s total cash and equivalents crested the $17 billion mark. Closing out the quarterly view, Tesla’s automotive incomes were just over 90% of its total top line.

2021 in retrospect

Tesla’s year was strong when considered as a whole. The company’s revenues rose around 71% to $53.82 billion, leading to adjusted EBITDA of $11.62 billion and net income of $5.52 billion. Given Tesla’s profitability and rising cash position, I wonder if the company will eventually work toward a dividend, so great are its cash incomes compared to its cash requirements, even taking into account its capital expenditures.

Why isn’t Tesla’s stock moving after its report? It appears that the results largely met expectations, meaning that they were already priced into its share price. Worth around $937 per share at the moment, Tesla’s market cap is over $941 billion, per Yahoo Finance.

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