Tesla shares seesaw after earnings as bottom line beat balances margin concerns (update)
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Tesla (NASDAQ:TSLA) shares traded in a volatile manner in Wednesdayâs extended session after posting stronger than expected profits, but light margins for the second quarter.
The Austin-based EV manufacturer posted non-GAAP EPS of $2.27 and revenue of $16.9B. Analysts had anticipated $1.80 and $17.1B, respectively. The strong bottom line figure appeared to assuage some concerns about the âgigantic money furnaceâ gigafactories in Austin and Berlin weighing on that metric. Free cash flow also rose above estimates, hitting $619M against an expectation of $500M. 
While prices for Tesla (TSLA) vehicles are up 25% to 30% from a year ago, automotive margins compressed for the quarter to 27.9%. That figure falls below the 32.9% number that impressed in the first quarter and 28.4% notched in 2021. 
Having already reported a slightly disappointing delivery figure of 254,695 EVs for the second quarter, deliveries growth was projected to continue at a rapid pace from this slight slowdown.
"We plan to grow our manufacturing capacity as quickly as possible,â a slide deck released alongside the earnings results read. âOver a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries.â
Analysts had been optimistic on the metric despite understood troubles in China and supply chain pressures throughout the quarter. For example, Wedbush Securities analyst Dan Ives had opined just days before the results that a 50% pace could boost the long-term EV demand thesis around the stock.
Elsewhere, the company reported it had sold 75% of its position in Bitcoin (BTC-USD), alleviating some anxiety on that balance sheet burden. The position has been folded into other currencies outside of the crypto space. Total sales of the cryptocurrency amounted to $936M.
Hargreaves Lansdown analyst Laura Hoy lamented the likelihood that crypto bets "chipped away at profits". While she expressed relief that "most of the damage has been recognized" after the sale of 3/4 of the automaker's holdings, the bet itself is cause to scrutinize Elon Musk's impulsive behavior.
"The bitcoin losses point out an important part of the Tesla investment caseâits eccentric owner," she wrote on Wednesday evening. "While Muskâs impressive innovation has served the company well, his personal flair is starting to raise governance questions.â
Shares rose 2.22% shortly after the report crossed newswires, before dipping into the red as the extended session progressed. The stock then seesawed between slightly positive and slightly negative prior a conference call with analysts.
Read more on the issues to watch ahead of the earnings call.