Tesla Inc (NASDAQ:TSLA) recorded a profit for the second quarter in a row in the final three months of 2018, but the electric carmaker’s results still missed expectations, sending its shares lower in pre-market trade in New York.
Elon Musk’s company, which has racked up some huge quarterly losses in the past, posted a profit of US$139.5mln (£106.4mln) in the three months ended 31 December.
In per-share terms, earnings were US$1.93, but Wall Street’s number crunchers had pencilled in US$2.10.
Tesla’s top line performance was better than expected, with revenue rising to US$7.23 – US$200mln or so more than analysts had forecast.
But the profits miss has sent Tesla’s stock down 4.5% to US$294.90, although that still values the firm at above US$50bn – more than Ford Motor Company (NYSE:F) and on a par with Chevrolet and Cadillac owner General Motors Company (NYSE:GM).
Despite the negative share price reaction, the results marked progress for the manufacturer: this was only its fourth ever profitable quarter and its second in a row.
Tesla credited strong demand for its Model 3, manufacturing improvements and recent cost cuts for the turnaround.
“Last year was the most pivotal year in Tesla’s history,” said chief executive and founder Elon Musk.
“During our Model 3 production ramp, we went through significant challenges with the battery module line at Gigafactory 1 in Nevada, and later with our general assembly line in Fremont.
“Thanks to the hard work and ingenuity of our manufacturing teams, by mid-2018 we successfully overcame these challenges and stabilized Model 3 production at high volumes.”
Overseas sales could slow deliveries
He did warn, though, that deliveries may slow in the coming months as it starts to ship its cars overseas, a process which takes time.
“That's our biggest challenge,” said Musk. “It's not demand. It's how do we get the cars there fast enough.”
The challenge is especially acute in China, which is embroiled in a trade war with the US. Should the two parties fail to reach an agreement, it could mean higher tariffs on cars imported from the US.
To get around any issues with importing its cars, Tesla has started building a Gigafactory in Shanghai which it hopes will start producing cars by the end of the year.
Tesla said it expected to deliver 360,000 to 400,000 vehicles in 2019 - a growth of approximately 45-65% compared to 2018.
CFO steps down (again)
On a call with analysts, CEO Musk confirmed that chief financial officer Deepak Ahuja is retiring, although he did note that he would continue to serve as a “senior adviser” for “probably years to come”.
Ahuja originally joined Tesla in 2008 but resigned for the first time in 2015. He re-joined the company back in 2017, replacing then-CFO Jason Wheeler, who had abruptly resigned.
Filling his shoes is Zach Kirkhorn, previously the company’s vice president of finance.