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Tesla Inc (TSLA) Stock Rise After Q4 Earnings Report

Tesla Inc (TSLA) released its Q4 2017 earnings results after closing bell tonight. The Tesla Inc (TSLA) earnings release revealed a GAAP loss of $4.01 per share, which was much worse than the consensus of $3.63 per share in losses. The automaker posted non-GAAP losses of $3.04 per share, compared to the consensus estimate of $3.11 per share. Tesla Inc (TSLA)’s revenue rose to $3.3 billion, which was in line with the consensus.

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The Tesla Inc (TSLA) earnings release revealed $2.7 billion in automotive revenue and a GAAP automotive gross margin of 18.9%, compared to $2 billion and 22.6% in the year-ago quarter. The non-GAAP automotive gross margin, which excludes stock-based compensation and zero emission vehicle credits, was 13.8%. Energy generation and storage revenue rose to $298 million from $131.4 million a year ago.

Tesla Inc (TSLA) delivered 29,967 vehicles during Q4 2017, of which 28,425 were the Model S and Model X, while the other 1,542 were the Model 3. Model S and Model X deliveries increased 10% sequentially and 28% year over year. However, the automaker has been reallocating some of its production space to the Model 3, which limited the number of Model S and Model X vehicles it could produce.

Net orders for the Model S and Model X were close to the all-time high. Tesla Inc (TSLA) added that while some were worried that the less expensive Model 3 would cannibalize its more expensive models, it has found the opposite to be true. While consumer foot traffic has increased “considerably” in stores that have a Model 3 on display, orders for the Model S and Model X have also increased.

Tesla Inc (TSLA) deployed 143 MWh of energy storage products during Q4, representing a 45% year-over-year increase. The company will recognize 129 MWh of energy storage deployment in South Australia in Q1 2018. Tesla Inc (TSLA) deployed 87MW of energy generation systems in Q4, a 20% sequential decline.

Tesla Inc (TSLA)’s cash balance stood at $3.4 billion at the end of Q4 2017. The automaker said that “at some point” this year, it expects to “begin generating positive quarterly operating income on a sustained basis.”

The automaker said it has “significantly” ramped Model 3 production, and now it is still targeting a rate of 2,500 to 5,000 Model 3 cars by the end of Q2. However, Tesla Inc (TSLA) also set investors up for another disappointment, saying that its “prior experience on the Model 3 ramp has demonstrated the difficult of accurately forecasting specific production rates at specific points in time.” The company also said that net reservations for the Model 3 were still “stable” in Q4, and they have begun to grow more recently since it has been able to ship show units to some of its stores.