Earnings

Tesla loss: 87 cents per share, vs expected earnings of 10 cents

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Tesla reports larger-than-expected Q4 loss
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Tesla reports larger-than-expected Q4 loss

Tesla Motors posted a much worse-than-expected quarterly loss Wednesday, but its stock spiked after strong deliveries guidance for the current year.

The electric automaker reported a fourth-quarter adjusted loss of 87 cents per share on $1.75 billion in sales. Revenue rose 59 percent from the previous year, while its loss grew from 13 cents a share.

Analysts expected Tesla to post earnings of 10 cents per share on $1.79 billion in revenue, according to a consensus estimate from Thomson Reuters.

Still, Tesla's shares soared more than 10 percent in after-hours trading on the company's positive outlook for this year. Tesla said it expects to deliver 80,000 to 90,000 new vehicles in 2016, noting it is aiming for non-GAAP profitability for the year. Wall Street had expected about 79,000 deliveries for the year, according to StreetAccount.

Tesla shares had plunged about 40 percent this year, as of Wednesday's close, amid widespread global selling. Analysts eyed possible production headwinds for its recently launched Model X sport utility vehicle and upcoming Model 3 sedan, as well as the effect of lower gas prices.

Tesla said it delivered 17,478 vehicles in the fourth quarter, including 206 Model X vehicles. Global deliveries rose about 76 percent year over year in the quarter, which CEO Elon Musk called "really quite dramatic" during the company's post-earnings conference call.

Non-GAAP automotive gross margin, excluding credits, came in at 20.9 percent versus expectations for 22.8 percent. Average transaction price fell by about 2 percent.

Tesla Model S is seen ahead of the IAA Frankfurt Motor Show in Frankfurt, Germany on September 15, 2015.
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For the current quarter, Tesla plans to deliver about 16,000 vehicles, which would mark an increase of 60 percent year over year. The automaker also anticipates that its average transaction price will increase this year as the Model X becomes a larger share of its deliveries.

Tesla added that gross margins for the S should "begin to approach" 30 percent by the end of the year, while the X should have margins around 25 percent.

Amid a revamp of its product line, Tesla has also gone through a transition near the top of its ranks. Jason Wheeler, a former Google vice president for finance, took over as the company's chief financial officer on Nov. 30.

Still, Tesla has yet to cut back spending. Non-GAAP operating expenses hit $429 million in the fourth quarter, up 18 percent from the third quarter. Tesla expects operating expenses to increase about 20 percent for 2016 as it prepares to launch the Model 3 and continues to expand.

On the call, Wheeler said that Tesla has taken "real steps" to move to positive cash flow, including management of growth and expenses.

"It's a relentless focus on automotive unit cost reductions," he said.

The Model 3, which starts at a much lower price point than than the S and X, is expected to be delivered starting in late 2017.