Tesla Stumbles on Deliveries, Targets 57% Jump in Production

Source: courtesy of Tesla Motors
Tesla Motors Inc. (NASDAQ: TSLA) reported fourth-quarter and full-year 2014 earnings after markets closed on Wednesday. For the quarter, the electric car maker posted an adjusted diluted earnings per share (EPS) loss of $0.13 on adjusted revenues of $1.1 billion. In the same period a year ago, the company reported adjusted EPS of $0.02 on revenues of $761.34 million. Fourth-quarter results also compare to the consensus estimates for EPS of $0.31 and $1.23 billion in revenues.

For the full year, Tesla posted EPS of $0.14 on revenues of $3.6 billion, compared with EPS of $0.78 and revenues of $2.48 billion in 2013.

On a GAAP basis, the carmaker lost $0.86 per share, compared with a year-ago quarterly loss of $0.13 per share. GAAP revenue totaled $956.66 million. Adjusted revenue includes $138.97 million in deferred Model S gross profit due to lease accounting.

The carmaker built 11,627 vehicles in the quarter, reaching its production target of 35,000 for the full year. But Tesla was unable to deliver all those cars, delivering 9,834 in the quarter. The company said it was unable to deliver about 1,400 units in December for a variety of reasons, including severe winter weather and shipping problems. The vehicles were delivered in the first quarter.

In 2015 Tesla expects to build 55,000 units, including its new Model X beginning in the third quarter. The company began 2015 with more than 10,000 orders for the Model S and nearly 20,000 reservations for the Model X.

The company directly leased 647 cars in the fourth quarter and said it expects to lease “about the same percentage of cars” in the first quarter of 2015.

Adjusted gross margins in the quarter came in at 26.7%, below the company’s forecast for margin of 28%. Gross margin includes the sale of Tesla’s zero-emission credits for a total of $66 million in the quarter. The company “believe[s]” it can achieve a gross margin of 30% on the Model S in 2015, but forecasts first-quarter gross margin of 26%.

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Operating expenses are expected to rise 45% to 50% in 2015 as the company spends to increase engineering and design efforts. Capital spending is penciled in at $1.5 billion to add production capacity, complete development of the Model X, invest in the Gigafactory, increase the number of Supercharger stations by more than 50%, and invest in stores and service centers.

Shares are traded down about 7.5% at $197.00 in Thursday’s premarket. The stock’s 52-week range is $177.20 to $291.42. The consensus price target for the shares was around $271.00 before the report.

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