Tesla Earnings: Q3 Numbers And Analysis By Stifel

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Tesla Motors Inc (NASDAQ:TSLA) has acquired the status of an exceptional start-up luxury auto manufacturer, believe Stifel analysts James J. Albertine and Lucy Webster. However, the Stifel analysts are skeptical about the company’s goal of becoming “more than a niche luxury manufacturer” by bringing to market a below $50,000 price point EV, a segment where the users have shown little interest.

Tesla Earnings: Q3 Numbers And Analysis By Stifel

Also, the company is facing stiff competition that will affect the development time taken causing some glitches in operations, believe analysts.

Q3 numbers

Tesla Motors Inc (NASDAQ:TSLA) posted adjusted third quarter 2013 earnings per share of $0.12 compared to Stifel analysts’ estimate of $0.14 per share excluding lease accounting, stock-based compensation and non-cash interest expense. According to the Stifel report, diluted share count of 137 million hardly affected the earnings per share.

Total number of units delivered by Tesla came in at over 5,500 units compared to analysts’ guidance of 5,000 units. The EV manufacturer posted non-GAAP revenue of $603 million, which is an increase of 9% over the second quarter 2013 and analysts’ estimate of $498 million. Tesla delivered around 1,000 vehicles in the third quarter of 2013 to European customers. Average transaction value surged $109,000 in the third quarter of 2013 compared to $107,000 in the second quarter; however, this was less than the $114k estimated in the first quarter of 2013.

Tesla upgrades production guidance

Non-GAAP gross margin surged 21% (excluding ZEV credit revenue), compared to 14% in the second quarter of 2013 and analysts’ expectations of 19.5%. ZEV (Zero Emission Vehicle) revenue, for the third quarter, came in at $10 million, which was in line with Stifel analysts’ estimates. Research and development related expenses came in at $47.6 million for the third quarter of 2013, beyond analysts’ expectations of $43.1 million.

Tesla Motors Inc (NASDAQ:TSLA) posted non-GAAP selling general and administrative expense (SG&A) of $67 million compared to analysts’ estimate of $47 million. The company has upgraded its production to 550 cars per week compared to 500 cars in the second quarter of 2013. Production for the fourth quarter is expected to be 6,000 units, and for fiscal year 2013 it is expected at 21,500 units.

The report from Stifel notes that Tesla has started taking orders from China during the third quarter, and the Model S is expected to be delivered starting the first quarter of 2014.

Dressing numbers to make them appear attractive

Overall, the third quarter results from Tesla Motors Inc (NASDAQ:TSLA) were not so appealing, so to divert attention from the not so exceptional results, the automaker designed the report card in a way to look attractive to shareholders. The Model S maker continues to report non-GAAP income for the third quarter, posting net earnings of $16 million including the earnings from leasing the Model S. From GAAP standard, Tesla lost $38 million or 32 cents per share, says a report from Wired. Zero emission vehicle credits added only $10 million in revenue to Tesla for the third quarter which was down from $51 million in the second quarter.

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