Stock Take 26/07/2021

Tesla impresses again with a strong jump in sales and profits

The electric car manufacturer Tesla opened its books after the close of trading on Monday and reported on its business performance in the second quarter.

Tesla announced that earnings per share rose significantly from 0.436 US dollars to 1.45 US dollars in the reporting period. The company, led by Elon Musk, thus earned more than the market had expected; analysts’ estimates had been 0.943 US dollars per share. Overall, Tesla achieved a quarterly profit of more than one billion US dollars for the first time in its history. Revenues also increased significantly in the quarter under review; after 6.04 billion US dollars a year ago, Tesla generated 11.958 billion US dollars in the current second quarter. Analysts had previously expected 11.53 billion US dollars.

Tesla also achieved record figures for the delivery and production of its e-cars in the past quarter. The company delivered 201,304 vehicles to customers and produced 206,421 units – more than ever before in a single quarter since the company was founded in 2003.

Tesla further emphasized that it is on schedule with constructing the first plant in Europe in Grünheide near Berlin. The first electric cars are anticipated to roll off the production line there this year. Given various hurdles and discrepancies at the bureaucratic level, uncertainty about the timetable had increased in recent months. Meanwhile, there was a setback with Tesla’s semi-truck – Tesla postponed the first deliveries of the semi-truck to 2022.

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The quarterly figures clearly exceeded analysts’ forecasts. Nevertheless, the share reacted relatively cautiously in the after-hours trading, even though there were significant price gains of up to around 3 per cent at times. Tesla also achieved record delivery and production figures in the most recent quarter. The company delivered 201 304 e-cars to customers and produced 206 421 units – more than ever before in a single quarter since the company was founded in 2003.

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Tesla largely defied the computer chip and raw material shortages that have recently plagued the auto industry. Even though the company warned that the supply of chips and components could remain difficult and slow growth in the second half of the year, it did not compromise on its targets – on the contrary. Tesla had previously aimed to increase its deliveries by 50 per cent in 2021 after more than half a million cars in the previous year. Now the company has announced that it expects even stronger growth.

Tesla shares gained 1.02 per cent higher at 664.30 US dollars in after-hours NASDAQ trading.

Ryanair is still deep in the red

The sluggish recovery of the travel business in the Corona crisis kept the low-cost airline Ryanair in the red in the past quarter. In the first fiscal quarter to the end of June, the bottom line was a loss of 273 million euros, almost one and a half times as much as a year earlier. However, Ryanair CEO Michael O’Leary expects passenger numbers to rise significantly in the summer, provided rising infection figures do not lead to further setbacks in the airline business.

After more than five million passengers in June, passengers are expected to reach just under nine million in July and more than ten million in August. For the current financial year to the end of March 2022, O’Leary expects a small loss or, at best, a result close to zero. The number of passengers is expected to reach 90 to 100 million. Previously, he had assumed about 80 million passengers. Ryanair shares gained four per cent.

Lucid share listed on NASDAQ as of today

Lucid Group is traded on the US technology exchange NASDAQ under the symbol “LCID” as of today. The IPO took place via a SPAC, a Special Purpose Acquisition Company. On Friday, the merger of Lucid with the corporate shell “Churchill Capital Corp. IV” was approved in the second attempt. According to the company, 99 per cent of all shareholders voted in favour of the merger.

The merger with the shell company was already announced in February, but it only came about on Friday after Wall Street closed. In February, the combined company was already valued at almost 12 billion US dollars, as Reuters reported.

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On Friday, the then Churchill Capital Corp. IV shares closed NASDAQ trading at US$24.25. The new Lucid Group share then started Monday’s trading 4.08 per cent higher at 25.24 US dollars. By the end of trading, the stock had gained 10.64 per cent to 26.83 US dollars.

LVMH radiates luxury

LVMH earned strongly more in the first half of the year, both operationally and on the bottom line, and significantly increased sales. The core segment “Soft Luxury” in particular drove up results.

Operating profit rose to €7.63 billion for the French luxury goods group in the first half of the year. This was almost five times as much as in the same period last year and exceeded the first half of the pre-crisis year 2019 by 44 per cent. Revenue rose to 28.67 billion euros from 18.39 billion previously, according to LVMH Moet Hennessy Louis Vuitton SE.

The figures exceeded expectations. Analysts had expected an operating profit of 6.83 billion euros on sales of 28.36 billion.

Net profit was 5.29 billion euros, more than ten times the first half of 2020. Sales in the core fashion and leather goods division, which includes the Dior and Louis Vuitton brands, rose the most, by 74 per cent year-on-year to 13.86 billion euros. All other divisions also recorded high year-on-year growth, although the perfume and cosmetics and selective retail segments remained below pre-pandemic levels in terms of sales.

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