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Tesla reports better than expected Q1 sales, pushes semi deliveries to 2021

·Reporter
·4 min read
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Tesla (TSLA) reported top-line growth in the first quarter over last year and an unexpected profit, even after the coronavirus pandemic forced the company to temporarily halt operations at its flagship Fremont factory and dented demand among automakers across the board late in the quarter.

Shares of Tesla rallied more than 8% to $864.80 each as of 4:29 p.m. ET after results were released. If the gains hold into the regular session Thursday, it would mark the stock’s highest level since late February.

Here were the main metrics expected from the report, compared to consensus estimates compiled by Bloomberg:

  • Adjusted earnings per share: $1.24 vs. loss of 37 cents per share expected and loss of $2.90 per share Y/Y

  • Revenue: $5.99 billion vs. $5.81 billion expected and $4.54 billion Y/Y

  • Free cash flow: -$895 million vs. -$604.4 million expected

“In Q1, we reached our highest ever revenue for a seasonally slower first quarter as our total revenue grew 32% [year over year],” the company said in a statement. “Sequentially, our revenue was mainly impacted by lower deliveries, driven primarily by limitations on our ability to deliver vehicles towards the end of the quarter.”

Earlier this month, Tesla reported deliveries of 88,400 for the first quarter for an increase of 40% over last year, bucking the trend as peer automakers Ford, General Motors and Fiat Chrysler each reported delivery declines. However, the total was down from Tesla’s record 112,000 deliveries from the fourth quarter of 2019.

Tesla noted that the average selling price for its cars dropped further in the first quarter as demand shifted in favor of its more affordable Model 3 and Model Y vehicles.

Still, Tesla’s automotive gross margin improved to 25.5% in the first quarter, versus 22.8% over last year. The Model Y, which was delivered for the first time in the first quarter, contributed to profitability, “which is the first time in our history that a new product has been profitable in its fits quarter,” Tesla said.

HANGZHOU, CHINA - APRIL 21: A Tesla logo is seen at a Tesla store on April 21, 2020 in Hangzhou, Zhejiang Province of China. (Photo by Long Wei/VCG via Getty Images)
HANGZHOU, CHINA - APRIL 21: A Tesla logo is seen at a Tesla store on April 21, 2020 in Hangzhou, Zhejiang Province of China. (Photo by Long Wei/VCG via Getty Images)

Customers may have to wait longer for Tesla to begin delivering another new vehicle, however. The company said it is shifting its first Tesla semi deliveries to 2021, after previously expecting to begin handing over the vehicles this year.

As has been the case for many automakers, Tesla rolled back domestic production as widespread stay-in-place orders across the country forced residents to avoid most workspaces. Tesla suspended production at its Fremont factory starting at the end of the day March 23 and temporarily halted non-essential work at its New York factory, where the company produces its solar roof tiles.

In its update letter Wednesday, Tesla said it expects production of both Model Y in Fremont and Model 3 at its newly launched Shanghai Gigafactory will continue to ramp gradually through the second quarter. It said it is building capacity for Model Y at its Berlin and Shanghai Gigafactories, and expects deliveries to begin at both locations in 2021.

Tesla said Wednesday it has “the capacity installed to exceed 500,000 vehicle deliveries this year, despite announced production interruptions.” At its U.S. factories, “it remains uncertain how quickly we and our suppliers will be able to ramp production after resuming operations,” the company added.

Prior to the coronavirus outbreak, Tesla had said in January it believed full-year deliveries would “comfortably exceed 500,000.” However, many analysts assumed that given the coronavirus developments across the globe, expectations would need to be pared back.

Despite the coronavirus-induced challenges for the auto industry as a whole, Tesla’s stock has remained resilient for the year to date. Shares have risen 91% since the start of 2020 for the best performance in the Nasdaq 100.

This post is breaking. Check back for updates.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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