Tesla Jumps After Projecting Up to 78% Growth in Deliveries

Tesla 4Q Revenue Lighter Than Analyst Estimates
  • Forecast bolsters investors despite fourth-quarter loss
  • Automaker says smaller Model 3 sedan will be revealed March 31

Tesla Motors Inc. rose in extended trading after the electric-car maker led by Elon Musk forecast global deliveries will rise as much as 78 percent this year, cheering investors who have been concerned that the automaker may not be able to manufacture its vehicles quickly enough.

The outlook for 80,000 to 90,000 deliveries, which was included with news of a fourth-quarter loss in a letter to investors posted on Tesla’s website, topped the average of analyst estimates for 76,200 deliveries. Tesla shares gained as much as 15 percent to $164.90 in extended trading.

Investors had wiped out more than $12 billion from Tesla’s market value on concern that low gasoline prices would cut into sales of electric vehicles and that Tesla may not be able to produce the complex Model X SUV in high volumes. The Palo Alto, California-based company began Model X deliveries in September, reaching only 206 by the end of the year. Tesla said it will be able to make almost 1,000 a week by the second quarter, and that falling gasoline prices haven’t dented order rates.

“It doesn’t sound like they have the Model X completely figured out from a production standpoint, but they can get there,” Ben Kallo, an analyst with Robert W. Baird & Co., said Wednesday in an interview.

Model 3 Timing

Investors were also reassured that the smaller, cheaper Model 3 car would be revealed March 31 and begin deliveries late next year. Tesla said it plans to open about 80 retail locations and service centers and add about 300 Supercharger locations, without specifying where.

“The timeline of late 2017 for the Model 3 is really important,” Kallo said. “Investors want to see them stick to timelines after numerous delays with the Model X.”

Wednesday’s earnings call with analysts is the first to feature new Chief Financial Officer Jason Wheeler. The former Google executive replaced Deepak Ahuja, who retired.

Tesla reported almost $1.2 billion in cash and equivalents at the end of the fourth quarter. That was down $229 million, or 16 percent, from three months earlier. The company said it expects that its cash balance will increase this year from the end of 2015 and that it won’t need to raise more money.

The company said its Energy unit has installed its first Powerwall home-battery units in the U.S., Australia and Germany.

Quarterly Loss

Excluding some items, the company lost 87 cents a share, compared with the average analyst estimate for a 10-cent profit. Tesla said its fourth-quarter loss excluding some items widened to $113.9 million from $16.2 million a year earlier. For the full year, the loss on that basis was $294.9 million, compared with profit of $20.1 million for 2014.

Quarterly sales, including revenue deferred due to lease accounting, were $1.75 billion, Tesla said. That missed the $1.81 billion average of analyst estimates compiled by Bloomberg.

Before the letter was posted, Tesla shares fell 3.1 percent Wednesday to close at $143.67 in New York for a decline this year of 40 percent.

Musk on Monday exercised options to buy 676,000 shares of Tesla for $6.63 apiece, according to a separate filing, paying $4.48 million for shares valued at $97.1 million as of Wednesday’s close. He had paid the same price for 532,000 shares late last month.

Musk’s fortune has been hurt by declines in the stock prices of Tesla and SolarCity Corp., in which he is the biggest shareholder. This year, his wealth slid 34 percent to $8.2 billion, according to the Bloomberg Billionaires Index.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE