Tesla Q4 Results: Topline and Bottom-line beat estimates!

Tesla Q4 Earnings
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Revenue beat estimates - Tesla reported revenue of $17.7 billion in Q4 and earnings of $2.54 per share. These numbers are higher than analysts' expectations of $16.57 billion and $2.36 in revenue and earnings, respectively. YoY, the revenue increased by 65% in the quarter. The automotive revenue increased 71% to $15.97 billion. Energy generation and storage revenue were $688 million, which was down 8% and below the consensus of $815.1 million. It was the lowest revenue for that division since the first quarter of 2021.

Net Income - The net income was up by 760% at $2.32 billion. The gross margin increased by 80 basis points from 26.6% in the previous quarter to 27.4% in Q4. YoY, operating income was primarily impacted by the following items: 

  • further per vehicle cost (COGS) reduction 
  • growth in vehicle deliveries 
  • improved profitability of automotive leasing and Service & Other business 
  • increase in SG&A due to $340M payroll tax on 2012 CEO award option exercise. 
  • rising raw material, commodity, logistics and expedite costs 
  • increased warranty and recall cost related to a specific batch of vehicles

Update on Chip shortage - The company said that factories have been running below capacity for several quarters as the supply chain became the main limiting factor, which is likely to continue through 2022. The chip shortage will continue in the current year.

Vehicles sold - Tesla produced 305,840 vehicles and delivered 308,600 in the last three months of 2021. The company topped its previous record in the third quarter to bring total deliveries for the year to 936,172 — up 87% from 2020’s number. 

Tesla Q4 Results Review:

Tesla has reported Q4 earnings above street estimates. However, Tesla will remain “chip-limited” in 2022, and hence the company would introduce no new vehicle models this year. The company is not currently working on a $25,000 compact electric vehicle. Their factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022. Tesla plans to grow its manufacturing capacity as quickly as possible. Over a multi-year horizon, they expect to achieve 50% average annual growth in vehicle deliveries. 

Target Price - The 34 analysts offering 12-month price forecasts for Tesla Inc  have a median target of $1,032.50, with a high estimate of $1,580 and a low estimate of $670.

Tesla share closed at 2.07% higher at $937.41 on Wednesday.

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