Tesla Motors, Inc. (TSLA - Analyst Report) logged adjusted income (including stock-based compensation expense) of 13 cents per share in the fourth quarter of 2013, rebounding from a loss of 78 cents per share recorded in the year-ago quarter. This compared favorably with the Zacks Consensus Estimate of 4 cents.
Fourth-quarter 2013 earnings exclude non-cash interest expense related to convertible notes of 3 cents per share and deferred gross profit for Model S due to lease accounting of 22 cents. On the other hand, fourth-quarter 2012 earnings exclude the unfavorable change in fair value of warrant liability of 1 penny per share. Including these items, the company reported net loss of $16.3 million or 12 cents per share compared with $89.9 million or 79 cents in the fourth quarter of 2012.
Revenues, excluding Model S revenue deferred due to lease accounting, jumped 148.5% to $761.3 million in the quarter from $306.3 million a year ago, beating the Zacks Consensus Estimate of $679 million.
Year-over-year improvement in revenues was driven by higher vehicle deliveries. Tesla delivered 6,892 cars in the fourth quarter. The automaker also benefited from the sales of electric powertrain components to Toyota Motor Corp. (TM - Analyst Report) and Daimler AG (DDAIF).
Gross profit, excluding Model S gross profit deferred due to lease accounting and stock based compensation expense, amounted to $189.8 million in fourth-quarter 2013, against $134.6 million in the year-ago quarter.
Revenues, on a reported basis from Automotive sales, jumped to $610.9 million in the quarter from $294.4 million a year ago. Reported revenues from Development services (producing electric vehicle, powertrain components and systems for other automobile manufacturers) declined to $4.4 million from $12 million a year ago.
Tesla recorded adjusted earnings of 15 cents per share in 2013, beating the Zacks Consensus Estimate of 10 cents. In comparison, the company generated loss of $3.67 per share in 2012.
Net loss (on a reported basis) reduced to $74 million or 55 cents per share from $396.2 million or $3.69 per share in 2012.
Revenues, excluding Model S revenue deferred due to lease accounting, surged 500% to $2.5 billion from $413.3 million in 2012, beating the Zacks Consensus Estimate of $2.4 billion.
Tesla had cash and cash equivalents of $845.9 million as of Dec 31, 2013, compared with $201.9 million as of Dec 31, 2012. Long-term debt was $586.3 million as of Dec 31, 2013, versus $452.3 million as of Dec 31, 2012.
Cash flow from operating activities amounted to $258 million in 2013, compared with cash outflow of $266.1 million in 2012. Capital expenditures increased to $264.2 million from $239.2 million in 2012.
Production volume in the first quarter of 2014 is expected to increase to 7,400 cars, from 6,587 cars produced in the fourth quarter of 2013. However, vehicle deliveries are expected to reduce to 6,400 from 6,892 cars in the fourth quarter due to increase in the number of vehicles in transit to Europe and Asia.
Thereafter, the deliveries are expected to surge significantly. Tesla anticipates delivering more than 35,000 vehicles globally in 2014, up 55% over 2013. It expects sales in Europe and Asia to be double the sales in North America by the end of 2014.
Tesla expects production volume to increase to 1,000 cars per week by the end of 2014 from 600 cars per week at present. Increased factory capacity and lower supplier bottlenecks will drive the improvement. The shortage of battery cell supply is expected to reduce by the second half of the year.
Adjusted automotive gross margin is expected to increase to 28% by the end of 2014. The company believes that declining supplier prices, design enhancements and economies of scale will benefit gross margin.
Operating and capital expenses are expected to surge during the year. Long-term investments for increasing production capacity, expanding the store, service and Supercharger infrastructure, completing Model X development and preliminary design work for the third generation car will increase the expenses of Tesla.
Operating expenses are expected to increase 15% in the first quarter of 2014. Further, the company believes that research and development expenses will increase in the quarter due to design and engineering work on Model X. Selling, general and administrative (SG&A) expenses are also projected to increase due to increase in retail locations and Supercharger facilities.
Tesla is also working with its suppliers to start a Tesla Gigafactory to produce precursor material, cell, module and pack in one facility to reduce cost of battery packs.
Tesla designs and manufactures electric vehicles and electric vehicle powertrain components for partners including Toyota and Daimler. The automaker currently carries a Zacks Rank #1 (Strong Buy).
Tata Motors Ltd (TTM - Snapshot Report), another Zacks Rank #1 stock, is also performing well in the automobile industry.