Tesla disappoints Wall Street despite strong earnings

The electric-car maker reported adjusted fourth-quarter profit of $ 903 million, excluding specials, more than double its profits a year ago, but below the $ 1.1 billion forecast by analysts. Net profit was $ 270 million, well below the $ 780 million estimated by Wall Street.

The company posted quarterly revenue of $ 10.7 billion, up 46% from a year earlier, and which – unlike earnings – beat Wall Street forecasts.

Still, results have leveled off a year of strong growth for the company despite issues associated with the temporary shutdown of Covid-19 factories and the onset of a global recession that has slowed auto sales overall.

Revenue rose 31% for the year and adjusted income rose more than 6,700% from the modest profit Tesla recorded on that basis in 2019, the automaker’s first profitable year. Net profit for 2020 was $ 721 million, compared to a net loss of $ 862 million a year earlier.

And the company has given an optimistic outlook for the future, predicting that it can achieve sales growth of 50% or more per year and that it expects 2021 to be one of those years when it exceeds this target.

Tesla opened its second auto plant in Shanghai in late 2019 and is building new factories near Berlin, Germany and Austin, Texas.
Its 2020 sales of around 500,000 cars are still only a fraction of those sold by established automakers. Volkswagen, the industry leader, sold 9.3 million vehicles last year. But established automakers like Volkswagen and General Motors (GM) are scrambling to shift production from traditional gasoline cars to electric vehicles.

Tesla also said it expects its profit margin to continue to improve. It said an auto industry gross profit margin of 25.6% in a full year, up 4.4 percentage points from the previous year.

She now has all the money she needs to fund future vehicle and expansion projects, the company said. It produced free cash flow of $ 2.8 billion, up 158% from the previous year, which was the first year it had positive cash flow. Previously, the company often faced a cash flow crisis. Demand for his stock helped him raise billions last year through a series of additional stock offerings.
Tesla has started deliveries of Chinese-made Model Y
Despite the positive results, the shares of You’re here (TSLA) fell about 6% in after-hours trading, although that figure was up from a steeper drop immediately after the report was released. Shareholders have enjoyed a 743% rise in the share price in 2020 and a 25% surge since the start of the year through Wednesday’s close, making it by far the automaker most valuable automobile in the world. Tesla is worth more than the 10 largest automakers combined and is now one of America’s most valuable companies of any type.

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