Tesla Q1: In the Black and on Track
Tesla Motors made good on its promise to deliver the first quarterly profit in the company’s 10-year history, posting Q1 earnings that prove it is indeed on the sometimes evasive path to full profitability.
After market close on Wednesday, the luxury electric automaker reported its first-ever profit: $11 million on revenue of $562 million. Excluding one-time items, adjusted quarterly earnings were $15 million, or 12 cents a share. Analysts had expected Tesla to post a profit of 4 cents a share on revenue of $500.2 million, according to a consensus estimate from Thomson Reuters.
The company said it built more than 5,000 Model S cars during the quarter, and recognized 4,900 of them as revenue — 400 more than expected. Better still, from the fourth quarter to the first, Tesla’s total gross margin rose from 8 percent to 17 percent. The company has projected that its gross margin will hit 25 percent by the end of the year. And, as of right now, it’s clearly on track to do so. (Caveat: The company’s margins do depend on emissions credits, which some observers worry might be fleeting.)
In a letter to Tesla shareholders, company founder Elon Musk, who’ll be appearing onstage at our 11th D: All Things Digital conference later this month, said he sees significant potential for the Tesla overseas.
“We are pleased with the strong global demand for Model S and are currently receiving orders at a rate greater than 20,000 per year worldwide,” he said. “Importantly, we are seeing orders in a particular region increase proportionate to the number of deliveries, which means that customers are selling other customers on the car. Given that we have not yet delivered any customer cars outside of North America, there would appear to be significant upside potential in Europe and Asia.”
Encouraging news. Tesla shares — which have been on a tear for a few months now, gaining about 67 percent this year — are spiking in after-hours trading. At $61.65, they’re up well over 10 percent as I write this.