Tesla’s Q4 revenue of $7.4 billion Musk: Delivering more than 500,000 vehicles this year

Electric car maker Tesla reported better-than-expected fourth-quarter 2019 results Wednesday local time. Tesla reported revenue of $7.4 billion in the fourth quarter of 2019, up 2 percent from $7.2 billion a year earlier, and earnings of $105 million, compared with adjusted earnings of $2.14 per share, compared with $140 million and $2 per share a year earlier. Tesla’s shares rose nearly 8 percent after the earnings report, spurred by a host of positive news.

Tesla's Q4 revenue of $7.4 billion Musk: Delivering more than 500,000 vehicles this year

Here are Tesla’s fourth-quarter results summary for 2019:

Tesla’s revenue for the fourth quarter of 2019 was $7.4 billion, up 2 percent from $7.2 billion last year and above analysts’ average estimate of $7 billion.

Tesla’s net profit for the fourth quarter of 2019 was $105 million, down from $140 million a year earlier.

Tesla earned $0.56 per share in the fourth quarter of 2019, an adjusted $2.14, above market expectations of $1.72, compared with $2 a year earlier.

Tesla produced nearly 105,000 vehicles in the fourth quarter of 2019, delivering about 112,000 vehicles, both in production and delivery volume. Throughout 2019, Tesla delivered about 367,500 vehicles, up 50 percent from the previous year.

Tesla produced 17,933 Model S and Model X units in the fourth quarter of 2019, with delivery of 19,450 vehicles, and Model 3 production of 86,958 vehicles with 92,550 deliveries;

Tesla said it expects to continue to deliver positive cash flow and net profit, but exceptions may be made as new products are introduced and production increases are increased. The company’s gross margin for cars fell slightly year-on-year in the quarter, up 22.5 percent month-on-month.

Tesla has begun producing its latest cross-border SUV Model Y at its autoplant in Fremont, California, and plans to build the Model Y at its super plant in Brandburg, Germany, in 2021. Elon Musk, Tesla’s chief executive, expects the Model Y to be the company’s new best-selling model. The crossover will begin delivery at the end of March, faster than previously thought.

Tesla said car deliveries would be “easily over 500,000” by 2020. The company has reported delivering 112,000 vehicles worldwide in the fourth quarter, the highest quarterly delivery for Tesla. That’s well above Wall Street’s expectations and at the low end of Musk’s end-of-year sales target.

“Due to the launch of the Model 3 in Shanghai and the launch of the Model Y in Shanghai and Fremont respectively, this year’s production is likely to exceed deliveries,” Tesla said in a statement. The Model 3 and Model Y currently have a total capacity of 400,000 vehicles a year, and the Tesla plant is adding machines to increase that number to 500,000 vehicles a year. “

Tesla’s cash position also improved in the fourth quarter, further easing concerns about its once-closely watched cash balance. Cash and cash equivalents increased by $930 million to a record $6.3 billion in the quarter. Tesla said this was achieved “through ongoing cost control of the entire business”.

Tesla’s shares have risen more than 120 percent since october 2019, when it released its third-quarter 2019 results. At the time, Tesla made a surprise profit after slashing spending, expanding Model 3 sales outside the U.S. and confirming at least $30 million in revenue related to the driver-assisted driver’s system Autopilot update. Autopilot updatebrings what’s called “Smart Call” for Tesla Motors.

Tesla’s share price has continued to rebound after the update, with investors particularly bullish on its prospects in China, where the company has built a superfactory.

Musk has previously said he expects his electric car and solar businesses to be sustainable from the third quarter of 2018. Tesla, which first went public in 2010, has been losing money for most of the time, focusing instead on growth and science fiction-like product roadmaps. Last year, Tesla raised more than $1 billion in new capital and told investors it would launch a fully functional, fully autonomous cab by 2020.

So far, Musk, 48, has dismissed predictions that Tesla will struggle to compete with the established carmaker’s upcoming electric cars. The Model 3, the best-selling electric car in the U.S. last year, jumped into the mainstream in Europe and was third among all models in December.

Tesla recorded a non-consecutive earnings quarter in 2013 and 2016, respectively. Tesla made a profit in the third and fourth quarters of 2018, but returned to the red in the first half of 2019.

Tesla shares rose $14.09, or 2.49 percent, to $580.99 in regular trading Wednesday. The results, which were released after the close, sent the stock up another 11 per cent to $647.38. So far this year, the stock has risen 39 per cent.