Tesla Q4 2023 Earnings Review
$Tesla(TSLA.US$ I'll be using 2 articles to summarize Tesla Q4 2023 earnings.
InsideEVs:
The electric automaker again turned a profit, which makes 17 quarters in a row in which Tesla has reported profitability. But Tesla fell short of expectations in regard to both profit per share and revenue: Actual: $25.167 billion in revenue $0.71 profit per share (Non-GAAP) Analyst expectations: Revenue: ~$25.598 to $25.640 billion Profit per share: ~ $0.73 to $0.74 per share. Revenue and profitability: 1) Total revenue grew 3% YoY in Q4 to $25.2B 2) Operating income decreased YoY to $2.1B in Q4, resulting in an 8.2% operating margin Other earnings highlights:
1) Free cash flow remained strong in 2023 at $4.4B, even as we focused on future growth projects with our highest capital expenditures and R&D expenses in company history
2) Gross profit of our Services & Other business increased from a ~$500M loss in 2019 to a ~$500M profit in 2023 3) Cost of goods sold per vehicle declined sequentially in Q4.
CNBC: Tesla reported revenue and profit for the fourth quarter that missed analysts' estimates as automotive revenue increased just 1% from a year earlier. The stock slid almost 5% in extended trading.
Earnings per share: 71 cents, adjusted vs. 74 cents expected by LSEG, formerly known as Refinitiv. Revenue: $25.17 billion vs. $25.6 billion expected by LSEG. Profitability: 1) Total revenue increased 3% from $24.3 billion a year earlier.
2) Operating margin for the quarter came in at 8.2%, down from the year-ago quarter's figure of 16% and slightly higher than 7.6% in the prior quarter.
3) Net income for the quarter more than doubled to $7.9 billion, or $2.27 per share, from $3.7 billion, or $1.07 per share, a year earlier.
Other highlights:
1) Tesla said automotive revenue reached $82.42 billion, a 15% increase from 2022.
2) The energy division, which is much smaller than Tesla's core business, was a bright spot, with revenue rising 54% to $6.04 billion.
3) Tesla's "Services and Other" revenue rose 37% from a year earlier to $8.32 billion.
4) Operating income decreased year over year to $2.1 billion in the quarter, with Tesla blaming the declining profits on the reduced average sales price of its vehicles and an increase in operating expenses "partly driven by AI and other R&D projects."
5) Spending on research and development increased to $1.09 billion from $810 million a year earlier, though it was down from $1.16 billion in the prior quarter.
Production forecast:
1) Tesla said in its investor presentation that vehicle volume growth in 2024 "may be notably lower" than last year's growth rate as the company works toward launching its "next-generation vehicle" in Texas.
2) The company said in its investor deck that, "We expect the ramp of Cybertruck to be longer than other models given its manufacturing complexity." Tesla said it now has the capacity to build more than 125,000 of the vehicles in a year.
Source: Tesla shares drop 6% on weak auto revenue, warning of slower growth in 2024 - CNBC Information from X.com:
1) 15 consecutive positive quarterly Free Cash Flow or FCF:
2) Positive highlights in Tesla Q4 earnings:
Bottom line:
Don't be disheartened by the temporary share price volatility. Tesla earnings report looked better than expected with many positive attributes. There's no correlation between earnings and share price if the company's fundamentals are strong. Tesla is in much better shape compared to its peers like VW, BYD, Fords, Nio, Xpeng, Li Auto Rivian etc.
In January 2023, Tesla's share price hit $100 after reporting Q4 2022 earnings. The share price rose to 134% YTD in 2023. The statement "Stock market is a voting machine in the short run and a weighing machine in the long run" best described Tesla stock performance in 2023.
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I reflected trading experiences by writing journals. My comments are for educational purposes not financial advice.
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ZnWCOP : Don't just look at the media headline, read the Q4 earnings report with a growth mindset. It is a good practice to look at both views - negative and positive. Ignore baseless comments especially those negative bias.
Invest With Cici : Nice article!
ZnWCOP : Chinese EV stocks sell-off after HK stock exchange opened today. Nio faced the hardest hit -5.48%. I won't be surprised that the media will put blame on Tesla Q4 earnings and/or Tesla's price cutting (instead of China's weak EV demand or China weak economic performance).
soyabean89 : what will be your view of price enter Tesla to average down?I'm bagholding 270 since july
ZnWCOP soyabean89: On whether if you should buy, hold or sell the stock, it depends on your holding power, investment goal and risk appetite. You can use the analyst ratings or TA indicators as a guide. I can't give you a definite answer as I'm not a financial advisor.