Tesla Motors Inc (TSLA) Reports $16M In Net Income And $603M In Revenues For Q3 2013

Tesla Model S
Tesla Motors Inc (NASDAQ:TSLA) has reported their financial third quarter 2013 results.  The Model S now has over 19,000 drivers across 20 countries.  Tesla Motors Inc (NASDAQ:TSLA) reported their largest delivery numbers at 5,500 Model S vehicles (including over 1,000 deliveries to European customers) and now they are producing 550 cars per week.

Tesla Motors Inc (NASDAQ:TSLA) reported that gross margins increased to 21%  (non-GAAP) excluding ZEV credits.  The net income (non-GAAP) was at $16 million.  The cash balance for Tesla Motors Inc (NASDAQ:TSLA) increased by $49 million to $796 million.

Tesla Motors Inc (NASDAQ:TSLA) has seen their 19,000 Model S owners drive in excess of 700,000 miles per day in over 20 countries.  They have driven their cars over 100 million miles.  Demand for the Model S is exceeding the supply despite no advertising, no discounts, and no paid endorsements.

Tesla Motors Inc (NASDAQ:TSLA) made improvements in their vehicle gross margin as the non-GAAP automotive gross margin (excluding zero emission vehicle or ZEV credits) rose to 21% from 14% last quarter.  The company was able to achieve cost reductions through various approaches such as process efficiencies, design improvements, and reduction of waste in the supply chain.

Tesla Motors Inc (NASDAQ:TSLA) started to take reservations in China during the quarter and are anticipating the first Model S deliveries there in Q1 2014.

Quarterly Revenues

Tesla Motors Inc (NASDAQ:TSLA) reported that Q3 non-GAAP revenues were $603 million, up 9% from Q2.  The GAAP revenues were $431 million, up 6% from Q2, despite the drop in ZEV credit revenue.  Why did the ZEV credit revenues drop?  The shift in the mix of sales to Europe and non-ZEV states in the U.S.  Excluding the ZEV revenue, non-GAAP revenues increased 18% from Q2.

The revenue growth was driven by an increase in vehicle deliveries and higher vehicle average selling prices due to European deliveries and higher mix of cars with 85 kWh battery packs.  Tesla Motors Inc (NASDAQ:TSLA) also continues to supply full electric powertrains to Toyota for the RAV4 EV.

R&D

Tesla Motors Inc (NASDAQ:TSLA) spent $48 million (non-GAAP) on research and development and $56 million based on GAAP.  R&D spending increased because of work on the Model S right-hand drive and localization in foreign markets.  Tesla Motors Inc (NASDAQ:TSLA) also accelerated the development work for the Model X vehicle.

Q4 2013 Outlook

Tesla Motors Inc (NASDAQ:TSLA) reported expanded production and is planning to deliver under 6,000 Model S vehicles for Q4 2013, which increases total expected deliveries to 21,500 vehicles worldwide for 2013.  The average selling prices are expected to stay flat due to a mix of options on incoming orders.  Tesla Motors Inc (NASDAQ:TSLA) is expecting R&D expenses to increase by about 25%.  Tesla Motors Inc (NASDAQ:TSLA) is also expecting non-GAAP profitability to be consistent with Q3.

Adjusted Earnings/Analyst Expectations

Tesla Motors Inc (NASDAQ:TSLA) reported Q3 adjusted earnings of $0.12 per share.  Analysts polled by Bloomberg was expecting adjusting earnings of $0.09 per share.  based on GAAP, Tesla reported a loss of $0.32 per share, which is worse than expectations for a loss of $0.25 per share.  Tesla Motors Inc (NASDAQ:TSLA) GAAP revenues were at $431 million, but analyst expectations were $554.33 million.

Tesla Motors Inc (NASDAQ:TSLA) stock is down over 20% after hours at $155.20 per share as of 6:42PM EST.  Tesla actually closed up at $176.81 on Tuesday.

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at
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