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Tesla Shares Slide After Bitcoin, Credit Sales Drive Earnings Beat

Bitcoin, regulatory credit sales and lower taxes added around 25 cents a share to Tesla's Street-beating bottom line, Credit Suisse analysts estimate.

Tesla Inc.  (TSLA) - Get Tesla Inc. Report shares slumped lower Tuesday as investors dug into the clean-energy carmaker's record first quarter earnings and offset improving margins and a robust outlook with one-time items that boosted its bottom line.

Tesla posted a Street-beating bottom line of 93 cents a share, with revenues rising 74.3% to $10.39 billion and automotive profit margins jumping 100 basis points to an impressive 26.5%.

However, the group's overall profits were partly flattered by a $100 million boost from the sale of bitcoin, a 46% increase in the sale of environmental credits worth $518 million and a lower tax rate, all of which combined to add an estimated 25 cents a share to Tesla's bottom line, according to analysts at Credit Suisse.

Still, Tesla reiterated its full-year forecast of 50% annual sales growth, with founder and CEO Elon Musk predicting that the Model Y will be "the best-selling car or vehicle of any kind in the world and probably next year".

"Global demand remains meaningfully higher than production levels. And so we're driving as fast as we can to increase our production rates. As we think about Q2 and Q3, these quarters should largely be driven by execution on S and X, as we've discussed, continued ramp of Model Y in Shanghai and the associated cost reductions of these programs," CFO Zachary Kirkhorn told investors on a conference call late Monday. "And we expect profitability and cash generation to evolve over the course of the year in line with those improvements."

"And then as we get toward the end of the year, our story will pivot toward the launch and ramp of our newest factories in Austin and Berlin," he added. "So there's certainly no shortage of exciting things for us to work on and look forward to."

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Tesla shares were marked 3.9% lower in late-morning trading Tuesday to change hands at $709.50 each, a move that trims the stock's year-to-date gain to around 0.5%.

Musk also said the global shortage in semiconductor supplies had been a "huge problem" for the carmaker, but noted that his team had done an "incredible job of dealing with really severe supply chain shortages" and added that "I think we're mostly out of the particular problem."

Tesla, which unveiled a purchase of $1.5 billion on February 8 when it published its annual report, noted Monday that its 'cash and cash equivalents' stood at $17.1 billion at quarter-end, including its bitcoin holdings.

Tesla's earnings statement said the bitcoin sale was $272 million, and noted that its 'digital assets" total at quarter-end was $1.331 billion.

"With production capacity at 1.05M vehicles now and two new factories scheduled to begin ramping later this year and in early 2022, we see significant headroom for deliveries, which likely will support shares as the story becomes more focused on validation and monetization of FSD," said Oppenheimer analyst Colin Rusch. "We are encouraged by the company's strong execution in a challenging environment and ability to leverage unique elements of its platform to mitigate supply chain risk."