Tesla’s Revenues Up, Some Targets Missed, Company Remains Optimistic

According to Tesla’s fourth-quarter and calendar-year 2014 financial statement, it was a mix of positive indicators and falling short against expectations.

Overall earnings were up from the year before, though numbers didn’t post as high as analysts’ predictions.

The increase in capital expenditures outpaced revenue gains over the year, as the company continues to add retail stores, service centers and Superchargers. And, Tesla CEO Elon Musk expects these costs to continue to grow in 2015.

“We’re going to spend staggering amounts of money on capex,” said Musk in a webcast today using lingo for capital expenditures.

Construction for the Nevada-based Gigafactory adds to the capital expenditires, but Musk is predicting the battery factory will be operational next year. That will enable the Model III and meanwhile its Model S production and sales increased on a global basis over 2013.

The electric carmaker just barely met its goal of 35,000 electric vehicles built last year, but many vehicles (globally) that were intended for delivery did not “sell” until January due to “customers being on vacation, severe winter weather and shipping problems (with actual ships).”

Total globally delivered 31,655 last year instead of a predicted 33,000, and in North America including Canada it was 17,400 units. U.S. sales were 16,563. Since the Model S went into production mind-2012, the company has globally delivered 56,782 units.

And for next year, Tesla will be aiming even higher.

Last November, Tesla set a production goal of 50,000 vehicles for 2015. Today, it bumped this figure up to 55,000. This total will include the Model S, and Tesla’s new SUV-crossover, the Model X.

Financials fall short of expectations

Tesla reports both GAAP and non-GAAP earnings, the latter of which Musk says provides a more accurate picture of cash flow although analysts have questioned this assertion, and non-GAAP does on paper appear better where GAAP can highlight losses and shortfalls.

“Our non-GAAP measures align the recognition of revenues and costs related to a vehicle sale with the time when the customer actually gets the car and we receive cash,” said Tesla.

For Q4, Tesla reported a non-GAAP revenue of $1.1 billion. While this is an increase from 2013 Q4 figures, it doesn’t quite reach the $1.22 billion in revenue anticipated by Bloomberg.

By non-GAAP measure, earnings wise, Tesla tallied fourth-quarter losses of $107.6 million. In after hours trading, TSLA is down almost 4 percent.

As for the value of those shares over the fourth quarter, TSLA was down $0.86 in Q4, with an adjusted net loss of $0.13 (non-GAAP). Again, this falls short of Bloomberg’s prediction that Tesla would earn $0.32 a share.

“No matter what investors should prepare for a big swing following its earnings release,” said Kristen Scholer with The Wall Street Journal. “According to Bespoke Investment Group, shares of the car maker move in about a 10-percent range in the session after it reports. That’s about twice the average of all stock reactions across the broader S&P 500.”

Tesla- revenue and gross margin

Expenses will continue to grow

Tesla spent $369 million on capital expenditures in Q4, which is 2.6-times more than what was spent in the first quarter. This puts the company’s total budget for the year at more than $950 million. Expansions for the Q4 included 21 new sales and service centers and 125 Superchargers locations.

Tesla gigafactory construction update
Tesla also reports that construction for the Gigafactory is on schedule.

“Significant steel fabrication of the structure started about two months ago,” said a Tesla statement. “We remain on plan to begin equipment installation later this year and for the start of battery pack production in 2016, in partnership with Panasonic.”

Tesla is anticipating that operating expenses will grow 45-percent to 50-percent in 2015.

SEE ALSO: Panasonic CEO: Tesla Capable of Producing 500,000 Cars In 2020

For the upcoming year, Musk said he is confident that the Model X will be ready for early deliveries as soon as the summer.

Furthermore, Musk said no matter how things may be interpreted, ultimately things are on their way up. In fact, Musk said, he is confident Tesla could rival Apple Inc. by 2025 with a market capitalization of $700 billion.