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Tesla's (TSLA) Q4 Earnings Beat Estimates, Revenues Grow Y/Y

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Tesla, Inc. (TSLA - Free Report) incurred an adjusted loss of $3.04 per share in fourth-quarter 2017, narrower than the Zacks Consensus Estimate of a loss of $3.19. The company had reported a loss of 69 cents per share in the prior-year quarter.

The reported net loss in the quarter was $675.4 million compared with the year-ago net loss of $121.3 million.

Revenues increased to $3.29 billion from $2.28 billion registered in fourth-quarter 2016. The figure came in lower than the Zacks Consensus Estimate of $3.30 billion.

In 2017, Tesla incurred adjusted loss of $8.66 per share, wider than $2.87 per share in 2016. Revenues during the year came in at $ 11.76 billion, higher than $7 billion in 2016.

In fourth-quarter 2017, Tesla delivered 29,967 vehicles. Also, the combined sales of Model S and Model X grew 28% from the year-ago figure to 28,425. During the quarter, 1,542 Model 3 vehicles were delivered.

Total automotive revenues, which include revenues from automotive sales and leasing, increased to $2.70 billion in the reported quarter from $1.99 billion a year ago.

Energy generation and storage revenues soared from $131.4 million in fourth-quarter 2016 to $298 million in the quarter.

Services and other revenues increased to $288 million from $159.1 million in the year-ago quarter.

Tesla’s fourth-quarter automotive gross margin was 13.8%, declining 490 basis points (bps) from third-quarter 2017 due to slower than anticipated ramp-up of Model 3 production.

Energy generation and storage gross margin declined 1,979 bps sequentially in the quarter to 5.5%.

Financial Position

Tesla had cash and cash equivalents of $3.37 billion as of Dec 31, 2017 compared with $3.39 billion, as of Dec 31, 2016.

Net cash provided by operating activities amounted to $509.9 million in the fourth quarter compared with net cash used of $448.2 million a year ago. Capital expenditures jumped to $786.7 million from $521.6 million in the year-ago quarter.

Business Expansion

In fourth-quarter 2017, Tesla opened 12 new stores. In 2017, the company managed to more than double the service capacity. Also, in 2017, 338 new Supercharger locations were opened for a global total of 1,128 stations.
 
Model 3 Update

During the quarter, Tesla has taken several steps to address the Model 3 production bottlenecks. The company continues to target weekly Model 3 production rates of 2,500 by the end of first-quarter 2018 and 5,000 by the end of second-quarter 2018. It also has the target to achieve the goal of 25% gross margin for Model 3, after the production stabilizes at 5,000 cars per week.
  
Outlook

Tesla expects to deliver around 100,000 units of Model S and Model X in 2018.

The company expects energy storage products to experience significant growth and targets to more than triple the sales in 2018. 

Capital expenditures in 2018 are expected to be slightly more than 2017. 

Zacks Rank & Key Picks

Tesla carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are Volkswagen A.G. , Oshkosh Corp. OSK and Daimler A.G. . While Volkswagen sports a Zacks Rank of #1 (Strong Buy), both Oshkosh and Daimler carry a Zacks Rank of #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Volkswagen has an expected long-term growth rate of 12.3%. The stock has gained 5.4% in the last three months.

Oshkosh has an expected long-term growth rate of 13.7%. Shares of the company have surged 13.3% in the last six months.

Daimler has an expected long-term growth rate of 2.9%. In the last six months, shares of the company have rallied 22.7%.

Tesla Inc. Price, Consensus and EPS Surprise

Tesla Inc. Price, Consensus and EPS Surprise | Tesla Inc. Quote

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