Tesla Record Profit Surpasses Estimates

Tesla has posted record profits, overcoming supply chain issues that have troubled the auto industry to blow away Wall Street's company forecast for the first quarter of 2022.

The company earned adjusted income of $3.7 billion, much higher than the $2.6 billion forecast by many analysts.

Tesla founder Elon Musk said the company should be able to produce 1.5 million vehicles this year, better than a 50% increase from its 2021 output.

The company is on a run of 50% annual growth, which Musk believes can be repeated for “the foreseeable future, and for basically several of the next years.” Shares of Tesla jumped 4% in after-hours trading following the company's earnings report.

The one blot on the Tesla copybook is the high prices of its vehicles. Indeed, the Model 3 has increased in price by 34% over the last three years. Musk has cited high inflation and supply chain issues as the leading factors behind the increases.

What does this mean for me? 

Tesla is on a run of pleasing growth for anyone who has a stake in that company. For stock investors, it is now important to watch how the rest of the electric vehicle market responds to Tesla’s success.

Competitive forces could spoil the party in coming quarters, with automaking behemoths like Volkswagen coming for Tesla’s market share.

Stock traders need to keep a close watch on the performance of the companies in their portfolios, especially during earnings reporting season, which is a vital task.