Tesla Motors Inc (TSLA) Earnings Not Worth the Wait

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Tesla Motors Inc (NASDAQ:TSLA) finally released its fourth quarter and full year earnings. The company announced yesterday that it would be delaying the release until later in the afternoon and then sent out a contradicting release right after market close saying earnings were out, without the release, confusing impatient investors.
Nonetheless the company recorded record quarterly production of 11,627 vehicles to hit its 35,000 production target for 2014, delivered 9,834 vehicles, and projects 70% growth in deliveries in 2015. The company also said that the Model X should begin shipping in 6 months.
Q4 and Full Year Results
Non-GAAP revenue came in at $1.1 billion for the quarter, up 44% from a year ago, while GAAP revenue was $957 million.  Revenue included $42 million of powertrain sales primarily to Daimler, and included $86 million of total regulatory credit. These credits included $66 million from sales of ZEV credits.
Q4 total company gross margin of 26.7% on a non-GAAP basis, and 27.4% on a GAAP basis. Excluding ZEV credits, margins were 22%.  The company stated margins were pressured by lower than expected average selling price and half from cost of goods sold. Capital Expenditures in the the quarter total $369 million and operating expenses were $297 million non-GAAP, and $337 million on a GAAP basis.
Q4 non-GAAP net loss was $16 million or 13 cents per share, while GAAP loss was $108 million or 86 cents per share.

FY non-GAAP net income was 14 cents per share, and a loss of $2.36 per share on a GAAP basis.

Cash at quarter end, including cash equivalents was $1.9 billion.
Non-GAAP revenue and gross profit is determined by adding back the deferred revenue and related costs.
2015 Outlook
The company expects to deliver 55,000 Model S and X vehicles in 2015. This would represent a 70% increase. First quarter production is expected to be 10,000 vehicles, reflecting a shorter quarter. Q1 non-GAAP gross margin should be 26%. Tesla noted that the euro has  weakened 7% since beginning of the year and that this impacts gross margin by about 2 percentage points. Operating Expenses are projected to grow 12% to 15% in Q1 driven by increased engineering design efforts.  The company hopes to keep growth of SG&A expenses down, by managing expenses efficiently.Capital Expenditures are expected to be around $1.5 billion for 2015 as the company expands production capacity, completes Model X development, and invests in the Gigafactory and more.
The company also hopes to improve Model S profitability and achieve a gross margin of 30% by the end of 2015 for the vehicle, along with achieving a higher level of non-GAAP profitability.

 

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