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Tesla (TSLA) Q4 Earnings & Sales Beat, FCF Jumps 49% Y/Y

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Tesla (TSLA - Free Report) reported fourth-quarter 2021 earnings of $2.54, which surpassed the Zacks Consensus Estimate of $2.11. A higher-than-expected automotive gross profit resulted in this outperformance. Precisely, automotive gross profit came in at $4,882 million, topping the consensus mark of $4,254 million. The bottom line also compared favorably with the year-ago earnings of 80 cents a share.

Total revenues came in at $17,719 million, beating the consensus mark of $16,070 million. The top line also witnessed year-over-year growth of 65%. Importantly, the electric vehicle giant reported an automotive gross margin of 30.6% and overall gross margin of 27.4% for the quarter. Further, operating margin came in at 14.7%.

Tesla, Inc. Price, Consensus and EPS Surprise

Tesla, Inc. Price, Consensus and EPS Surprise

Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote

Key Takeaways

Production and delivery totaled 305,840 and 308,650 vehicles, reflecting a year-over-year jump of 70% and 71%, respectively. Tesla reported record-setting fourth-quarter 2021 deliveries, thanks to the soaring popularity of green vehicles and rising preference for personal mobility. In fact, fourth-quarter 2021 marked the sixth consecutive quarter of ground-breaking deliveries by the world's most valuable automaker.

The Model 3/Y registered production and deliveries of 292,731 and 296,884 vehicles, marking year-over-year growth of 79% and 84%, respectively. Meanwhile, production and delivery of the Model S/X plunged 19% and 38% on a year-over-year basis to 13,109 and 11,766 units, respectively.

Total automotive revenues of $15,339 topped the consensus mark of $13,728 million and surged 70% year over year. The figure also included $314 million from the sale of regulatory credits for electric vehicles, which decreased 22% year over year. Automotive gross margin came in at 30.6%, expanding 648 basis points from fourth-quarter 2020.

Energy generation and storage revenues came in at $688 million for fourth-quarter 2021 compared with the year-ago period’s $752 million. The reported figure also fell short of the consensus mark of $828 million. Services and other revenues were up 57% year over year to $1,064 million and surpassed the consensus mark of $981 million.

Operating expenses totaled $2,234 million for the reported quarter, up from $1,491 million incurred in the corresponding period of 2020.

While Tesla has not provided any clear delivery target for 2022, it reiterated its goal of achieving 50% average annual growth in vehicle deliveries over a multi-year horizon.

Financials

Tesla had cash and cash equivalents of $17,576 million as of Dec 31, 2021 compared with $16,065 million on Sep 30, 2021. Net cash provided by operating activities amounted to $4,585 million for fourth-quarter 2021, up 52% year on year. Its capital expenditure totaled $1,810 million, up from the $1,151 million recorded in fourth-quarter 2020.

Tesla generated free cash flow of $2,775 million during the quarter, up 48.5% year on year. Long-term debt and finance leases — net of current portion on Dec 31, 2021 — totaled $5,245 million, down from $6,438 million on Sep 30, 2021.

Zacks Rank & Other Stocks Worth a Watch

Tesla currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Below we highlight two other #1 Ranked stocks if you wish to invest in the auto space.

Ford (F - Free Report) : The U.S. auto giant’s prospects are getting bolstered by a strong vehicle mix, supported by F-series trucks and SUV models. Ford’s aggressive electrification push, with the target of 40% global vehicle volume to become all-electric by the end of the decade, augurs well. While Mustang Mach-E has already become a hit among consumers, upcoming launches like F-150 Electric, Maverick hybrid pickup and E-Transit are set to further drive the firm’s top line.

The Zacks Consensus Estimate for F’s 2022 earnings and sales implies year-over-year growth of 8.1% and 15.4%, respectively. The 2022 bottom-line estimate has been revised upward by 6 cents a share over the past seven days.

Goodyear Tire (GT - Free Report) : Goodyear is the leading tire making company. The acquisition of Cooper Tire further strengthened GT’s leadership position in the global tire industry. Initiatives like Goodyear SightLine and partnership with ZF demonstrate the firm’s efforts to cater to the changing dynamics of the auto industry. The frequent rollout of innovative products and restructuring efforts bode well.

The Zacks Consensus Estimate for Goodyear’s 2022 earnings and sales implies year-over-year growth of 52% and 11%, respectively. The 2022 bottom-line estimate has been revised upward by 3 cents a share over the past 30 days.


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