Tesla Motors Inc (TSLA) Still Surprises, Wall Street Eats It Up

Tesla stockBlomst / Pixabay

Tesla Motors Inc (NASDAQ:TSLA) posted its fourth quarter earnings results after closing bell and managed to surprise Wall Street, even though expectations were already so high. The automaker reported earnings of 33 cents per share excluding items and GAAP losses per share of 13 cents. GAAP revenues were $615 million, while non-GAAP revenues were $761 million—a 26% increase from the previous quarter. Analysts had been expecting the automaker to report earnings of 21 cents per share on revenue of $683 million.

Breaking down Tesla’s results

Tesla Motors Inc (NASDAQ:TSLA) reported non-GAAP gross margins of 25.2% without the use of Zero Emission Vehicle credit revenue, which slightly ahead of their target of at least 25% margins by the end of the year. Tesla also reported positive free cash flow of $40 million during the fourth quarter.

Tesla Motors Inc (TSLA) surprised recently when it announced that it had beaten expectations for deliveries during the quarter, so that part was no surprise. It reported at the Detroit Auto Show that it had delivered around 6,900 vehicles during the December quarter. The final number ended up being 6,892 deliveries—a new record. The company also said last month that its revenue for the fourth quarter likely exceeded its earlier guidance by 20%. Those preannouncements left very little for Wall Street to be surprised to the upside about—and yet, Tesla still surprised.

Tesla’s guidance looks strong

Tesla Motors Inc (NASDAQ:TSLA) also guided for a strong 2014 with deliveries of more than 35,000 Model S sedans this year. The company said it expects to see its vehicle deliveries grow by more than 55%. For gross margins, the automaker is aiming for 28%, excluding the sales of Zero Emission Vehicle credits. Tesla also said it is producing about 600 cars a week but expects to expand that to 1,000 cars a week by the end of the year.

The company said it is planning to make its first Model S deliveries to China this spring and that it plans to make “substantial investments there by opening new stores and service centers and starting a Supercharger network.

Tesla Motors Inc (NASDAQ:TSLA) said operating expenses will likely grow by about 15% in the current quarter, while research and development expenses will rise too. The automaker continues to expand production capacity and invest in more stores and its Supercharger network, as well as the development of the Model X.

The automaker also said it would be ready to share more information about their battery Gigafactory “very shortly.”

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.

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