Tesla posts Q1 net loss of $49.8 million
The automaker posted net income of $11.3 million, or 10 cents a share, on revenue of $555 million during the same quarter last year.
The company sold 6,457 vehicles during the first quarter of 2014. Tesla reported a gross profit of $155 million, but a $44 million operating loss when accounting for r&d and sales and administrative expenses.
“We are sold out of Q2 production," Tesla CEO Elon Musk said in a call with analysts. “In some cases sales means demand, but in our case sales means deliveries."
Tesla prefers to use nontraditional accounting methods outside the typically generally accepted accounting principles. By Tesla’s own measurement, the automaker posted a $17 million profit on $713 million in revenues. On that basis, it gained 12 cents a share, which was better than the 7 cents analysts had expected, Bloomberg reported.
Non-GAAP financials exclude stock-based compensation and noncash interest expense, and add back the deferred revenue and related costs for cars sold with a resale value guarantee. Tesla’s only GAAP-based profit came in the first quarter of 2013.
During the fourth quarter of 2013, Tesla reported a $16 million net loss, on $615 million in revenue.
Tesla is showing stronger gross margins because of improvements to its cost structure, said Tesla CFO Deepak Ahuja.
But Musk quickly added, “We don’t do any cost-down if it makes the product worse. It drives me crazy when other car companies reduce costs by reducing value. In some cases we’ve added cost to the car because something needed to be improved."
In its earnings release, Tesla said it expects to deliver 7,500 units next quarter, and deliver 35,000 Model S sedans this year.
Battery cell supply currently is crimping production, a situation the automaker hopes will be resolved by the third quarter.
Another worry to positive earnings for the second quarter: Tesla forecast r&d expenses will increase by 30 percent, while selling, general and administrative expenses will increase by 15 percent. Based on the first quarter results, that increase will account for another $40 million in expenses over current levels.