Tesla reported a higher-than-expected seventh consecutive quarter of profit on strong demand for its top-selling Model 3 sedan but left its multiyear outlook for 50% growth in deliveries unchanged.
Profit at Elon Musk’s EV company rose to 93 cents a share on an adjusted basis, the Palo Alto, California-based automaker said Monday. That beat the 80-cent average of analysts’ estimates.
The results kick off a year in which Tesla will be expanding operations on three continents, including completing new factories in Austin, Tex., and Berlin. The company indicated it expects 50% annual growth in deliveries “over a multi-year horizon,” which is consistent with its previous wording.
“It’s all good, but there’s not a lot of news and it wasn’t a blowout,” said Gene Munster of Loup Ventures. “Everything happened that people thought would happen.”
Tesla fell 1.9% to $724.01 in aftermarket trading. It closed the session up 1.2% to $738.20.
Delivery outlook unchanged
The company delivered more than a half million cars in 2020 and reported deliveries of 184,800 cars worldwide in the first quarter, topping the last quarter of 2020 by about 4,000 vehicles. Analysts said they were looking for more detail from Tesla on a conference call scheduled for 5:30 p.m. Eastern time.
“While Tesla is committing to 50% delivery growth annually, the main focus of the call will be around Tesla leaning towards 900,000 vehicles as the bogey for 2021 guidance” Dan Ives, an analyst at Wedbush Securities, wrote in a note after the earnings release but before the call.
The EV market leader faces a new wave of competition from several new models being launched this year by startups such as Amazon.com-backed Rivian Automotive and established automakers including General Motors and Volkswagen.
Tesla sought to assure investors in its quarterly release by noting growing demand for EVs and its own efforts to rapidly expand production capacity. “As more OEMs join our mission by launching EVs, we believe consumer confidence in EVs continues to increase and more customers are willing to make the switch,” it said in a statement.
Regulatory credit boon
Tesla’s first-quarter revenue grew 74% to $10.39 billion in the January through March period, close to analysts’ estimates for $10.41 billion. Sales of regulatory credits rose to $518 million this quarter, up from $401 million in the last quarter of 2020.
The company earns more money selling those credits to other automakers than it does from its core business of making and selling cars. That’s a potential issue for Tesla as more established carmakers start to offer their own line-up of EVs — and may not need to buy as many credits in the future despite tightening carbon-emissions standards globally.
Tesla indicated it is getting better and more efficient at building cars. Its automotive gross margin of 26.5% came in above the Bloomberg consensus of 24.2%. The company attributed the boost to cost-cutting that outpaced lower average selling prices.