Few Quarterly Reports Have Been More Anticipated Than Today's From Elon Musk And Tesla
Tesla today reported a wider than expected loss of 62 cents a share (the street estimate was for 53 cents), while revenue for the 4th quarter came in at $306 million ($294 million from auto sales), about $8 million higher than expected.
But what everyone wanted to know was, would Tesla be able to hit benchmarks promised from their last report on November 5th, 2012,:
"Given Tesla’s rate of progress over the past few months, we are confident of being able to deliver 2,500 to 3,000 Model S vehicles in Q4 and over 20,000 in 2013."
The short answer: No
...and the shares took a nose-dive in the day after the announcement falling almost 9%. This after falling about 2% in the regular trading session yesterday. (Real-time quote here)
Tesla says they delivered about 2,400 cars in the fourth quarter, bringing their yearly total up to just over 2,650. Overall production of the Model S was said to be at 2,750 units for Q4 and 3,100 overall.
Tesla still plans to deliver 20,000 Model S sedans in 2013, but warns that it likely can only deliver about 4,500 in Q1 of 2013.
"...we gave the manufacturing team the first week of the year off to celebrate their accomplishments during 2012."
To us, this reasoning does not past the smell test, and the miss is more likely affected by Tesla's attempt to "work the system" and pull 2013 deliveries into 2012 by asking customers to complete transactions before they actually had taken possession of their cars, in order to boast 2012 sales. Sales that they knew were coming up short.
Tesla Expects To Deliver 4,500 Model S EVs In Q1 Of 2013
Statement From Elon Musk on Q4 deliveries:
"During the quarter, we delivered approximately 2,400 Model S vehicles. We delivered the remaining North American Signature Series cars and shipped exclusively cars with the 85 kWh battery pack. We also saw strong demand for options such as the Performance version and Tech Package. Finally, we sold most of our remaining Roadsters during the quarter."
Tesla did pull ahead the expectations for profitability (on a non-GAAP basis), saying "first profit now expected Q1 2013 versus prior guidance of late 2013."
Tesla notes the company received about 6,000 new reservations for the Model S in the last quarter of the year, however cancellation rates were also extremely high, and Tesla has yet to achieve the quarterly reservation rate necessary to sell 20,000 vehicles on an ongoing basis.
The forecast for current and future reservations were also not that great:
"New reservations continue at a steady, although slower pace in Q1 2013, as compared to December, due in part to the pull ahead of reservations into Q4 by customers seeking to avoid the price increase. Q1 cancellations are likely to remain elevated as the remaining older reservation holders are invited to configure their vehicles within a set time frame or pay the higher price just like new reservation holders."
Tesla Hopes The Upcoming Model X Can Assist In Meeting Production And Profitability Forecasts
Overall, Tesla says that first-quarter gross margins will be in the mid-teens and rise toward its target of 25% in the second half of the year.
Weighing heavy on the company is the fact Tesla is down to about $201.8 million in non-restricted cash after making their first loan repayment to the U.S. Department of Energy. For the fourth quarter of 2012, cash from operations plus capital expenditures was -$102 million.
For 2012 year end, Tesla had 32 stores and galleries worldwide, and plans to open 15 to 20 more stores and galleries this year. Tesla will start European deliveries of the Model S this summer, with Asian deliveries later in 2013.
Also in the "not good news" category is the news that Tesla notes that the delivery of their entry-level 40 kWh Model S is now not expected to begin until "later this summer."
If interested, you can read the results, and Tesla's shareholder letter here, or Tesla's actual 8-K filing