Tesla Motors (NASDAQ:TSLA) Misses, Musk Puffs…

Posted by: : Paul EbelingPosted on: February 11, 2015 Tesla Motors (NASDAQ:TSLA) Misses, Musk Puffs...

Tesla Motors (NASDAQ:TSLA) Misses, Musk Puffs…

Tesla Motors Inc (NASDAQ:TSLA) missed Q-4 sales targets and analysts’ profit expectations, but CEO Elon Musk Wednesday said by 2025 Tesla’s growth trajectory could take its market value to $700-B,  matching that of Apple Inc. Puffing, yes!

The fledgling EV company saw a difficult Quarter that saw it struggle with production and delivery issues on several fronts, notably in China.

Investors sent shares down nearly 4%in after-hours trade, after Tesla said heavy capital and operating expenses would escalate in Y 2015.

Expansion of the company’s global sales network and development of the new Model X crossover increased operating expenses in Q-4 to $336.5-M, from $169.9-M last year.

Operating expenses for the year were $1.07-B, and are expected to grow to 50% in Y 2015.

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Free cash flow in the Quarter was a negative $455.1-M, as cash fell to $1.91 from $2.37-B at the end of Q-3. The company’s burn rate next year should be less than $1.0-B, according to CFO Deepak Ahuja.

Mr. Musk told analysts late Wednesday that Tesla should return to positive cash flow in late Y 2015, saying he did not see the need to raise additional funds now.

He masked over  analysts’ question about Tesla’s cash position by voicing an upbeat picture of the company’s long-term prospects.

Mr. Musk said Tesla’s revenue this year could grow to $6-B, from $3.2-B in Y 2014. His Y 2025 market-cap prediction assumed 50% annual revenue growth and a PER( price-to-equity ratio) for the stock .

Wednesday, Tesla reported a Quarterly loss of $107.6-M, or 0.86/share, compared with a year-ago loss of $16.3-M, or 0.13/share. Revenue in the Quarter rose to $956.7, from $615.2-M last year

On a non-GAAP basis, Tesla said it lost 0.13/share. Analysts polled expected a profit of 0.31/share.

The California-based maker of luxury electric cars delivered 9,834 Model S sedans in the Quarter, well below CEO Musk’s earlier forecast of 13,000.

Tesla said it built a record 11,627 cars, boosting total production to 35,000 on the year. But the company delivered only 31,655 and said delays would push some deliveries into Q-1  of Y 2015.

Sales in North America in Y 2014 were flat, at about 17,400, or 55% of the total. About 9,500 cars were delivered in Europe and about 4,750 to the Asia Pacific region, including China, where sales began last April.

The company expects to deliver about 55,000 cars globally in Y 2015, an increase of about 74%. HeffX-LTN believes those numbers are extravagant.

Mr. Musk said Tesla’s $35,000 Model 3 should be in production by 2-H of Y 2017, and that its design will not be as “adventurous” as that of the gull wing Model X crossover, in order to keep the production schedule on track.

He said Tesla remains “on plan” to begin battery production in Y 2016 at a $5-B factory outside Reno, Nevada.

Shares of Tesla closed down 1.6% to 212.80 Wednesday and dropped another 3.9% in after-hours trade to 204.50. Tesla’s market cap at the close Wednesday close was $26.7-B.

Expect selling pressure in TSLA to push the price to the 14 January 2014 low at 185.83 and lower near term.

HeffX-LTN Analysis for TSLA: Overall Short Intermediate Long
Neutral (-0.18) Neutral (0.19) Neutral (-0.15) Very Bearish (-0.58)

Stay tuned…


Paul Ebeling

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

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