U.S. markets open in 3 hours 40 minutes

Tesla's (TSLA) Q4 Earnings & Revenues Beat Estimates, Up Y/Y

Zacks Equity Research

Tesla, Inc. TSLA reported earnings per share of $2.14 in fourth-quarter 2019, beating the Zacks Consensus Estimate of $1.62. This outperformance stemmed from higher-than-expected automotive revenues, which came in at $6.37 billion, beating the consensus mark of $5.96 billion. The earnings figure also came in higher than the prior-year quarter’s $1.93 per share.

During the reported quarter, net income attributable to common shareholders amounted to $105 million compared with the net income of $140 million recorded in the year-ago quarter.

Revenues increased to $7.38 billion from the $7.22 billion registered in fourth-quarter 2018. Also, the revenue figure surpassed the Zacks Consensus Estimate of $7.05 billion.

During the fourth quarter, Tesla reported record delivery of 112,095 vehicles.

Total automotive revenues, including that from automotive sales and leasing, inched up 1% year over year to $6.37 billion in the quarter.

Energy generation and storage revenues increased from $372 million in fourth-quarter 2018 to $436 million in the reported quarter. Services and other revenues were up 9.23% year over year to $580 million.

Tesla’s fourth-quarter 2019 automotive gross margin was 22.5%, shrinking 179 basis points (bps) from fourth-quarter 2018.

Tesla, Inc. Price, Consensus and EPS Surprise

Financial Position

Tesla had cash and cash equivalents of $6.3 billion as of Dec 31, 2019, compared with $3.69 billion as of Dec 31, 2018, driven by positive quarterly free cash flow of $1 billion.

Net cash provided by operating activities amounted to $1.43 million in fourth-quarter 2019 compared with $1.24 billion of net cash used in fourth-quarter 2018. Capital expenditure increased to $412 million from the year-ago quarter’s $325 million, mainly due to investments in Gigafactory Shanghai and Model Y preparations in Fremont.

Model 3 & S/X Update

In fourth-quarter 2019, Tesla reported Model 3 production and deliveries of 86,958 and 92,620 units, reflecting year-over-year increase from 61,394 and 63,359 units, respectively. During the quarter, the production rate of Model 3 continued to improve.

Model S/X production and deliveries totaled 17,933 and 19,475 vehicles, down 29% year over year.

Outlook

Tesla is making efforts to improve vehicle deliveries, sequentially and annually, with some expected fluctuations from seasonality. For full-year 2020, the company expects vehicle deliveries to exceed 500,000 units. Due to ramp-up of Model 3 in Shanghai and Model Y in Fremont, production will likely outpace deliveries this year. Both solar and storage deployments will be up at least 50% in 2020.

Zacks Rank & Stocks to Consider

Tesla currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector include Gentex Corporation GNTX, Blue Bird Corporation BLBD and SPX Corporation SPXC, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Gentex Corporation has an estimated earnings growth rate of 7.32% for 2020. The company’s shares have appreciated 40.6% in a year’s time.

Blue Bird has a projected earnings growth rate of 25.47% for the ongoing year. Its shares have gained 2.4% over the past year.

SPX has an expected earnings growth rate of 8.09% for the current year. The stock has rallied 73.4% in the past year.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Click to get this free report Blue Bird Corporation (BLBD) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report Gentex Corporation (GNTX) : Free Stock Analysis Report SPX Corporation (SPXC) : Free Stock Analysis Report To read this article on Zacks.com click here.