The luxury electric automaker misses expectations on revenues and earnings, selling fewer cars than expected - much to the chagrin of bullish investors.
Tesla Motors, the luxury electric automaker steered by CEO Elon Musk, reported strong fourth-quarter growth Wednesday but still fell short of Wall Street’s high expectations. Revenue rose 55% to $956.7 million, well below the $1.23 billion analysts had anticipated, according to Thomson Reuters.
Meanwhile, Tesla said it lost $107.6 million, or 86 cents a share, compared with a loss of $16.3 million, or 13 cents a share, a year earlier.
Factoring out non-cash executive compensation and other costs, Tesla said it had a loss of $16.2 million, or 13 cents a share. On that basis, analysts surveyed by Thomson Reuters had expected a profit of 31 cents a share.
Adding to the less-than-stellar results, Tesla fell short of its car delivery goal for the quarter, and as a result, for the year.
Here’s what you need to know from Thursday’s earnings:
What you need to know: Wall Street took a bullish view of Tesla with a consensus from Thomson Reuters estimating the tech-centric automaker would report a profit. Instead, Tesla reported a loss of $107.6 million largely due to a sharp uptick in spending as it retooled an assembly line that can produce both the Model S and Model X and from expanding into new markets. Total operating expenses were $336.5 million, nearly double the $169.9 million in the same period last year.
As for guidance, Tesla struck a positive tone with plans to deliver about 55,000 Model S and the anticipated Model X SUV vehicles in 2015. If the Palo Alto, Calif.-based company can meet that delivery goal, it would represent a 70% increase over 2014.
Following the earnings report, Tesla’s shares TSLA fell 3% in after-hours trading.
The big number: Many investors will focus on the company’s loss and spending. But another important figure to pay attention to is the number of Model S vehicles the company delivered in the fourth quarter.
Tesla delivered 9,834 Model S vehicles, falling short of the 11,200 it needed to deliver to meet its year-end—and recently revised—goal of 33,000. Tesla said production delays on its Performance All-Wheel Drive Dual Motor (P85D) Model S, which was announced in fall 2014, pushed some deliveries to the first quarter of 2015. The company also blamed the shortfall in deliveries on a combination of customers “being on vacation, severe winter weather and shipping problems (with actual ships).”
The company did manage to hit its production goals, making 11,627 vehicles in the quarter.
What you might have missed: Tesla said it is still on track to start deliveries of the Model X in the third quarter of 2015, serving as a bright spot in an otherwise dismal report. Tesla said that it already has 20,000 reservations for Model X, which hints at demand for the SUV.
Tesla plans to continue to ramp up spending, although not at the same pace as last year. Capital expenditures are expected to be about $1.5 billion as Tesla expands production capacity and completes the Model X development. It also plans to spend money on building service centers, stores and the massive battery factory that is currently under construction outside of Reno.
Tesla has struggled with in the China market, which has failed to live up to lofty expectations. Musk said last month at the Detroit Auto Show that the company experienced weaker than expected sales in the country due to perceptions by potential customers that it was difficult charging the car there. Tesla said that despite initial challenges in China, it’s convinced of the vast potential of the market. However, reports surfaced Wednesday that the company may fire some of its top Chinese executives.
Tesla will focus on the Chinese cities it has already set up shop, before launching into new locations in China. The company said in its earnings report that it is working on simplifying the buying process by having Tesla staff install charging points at customer homes of businesses before the car is delivered.