Tesla (TSLA) Stock Booms on Earnings

Shares of Tesla Motors (TSLA) are up almost 16% at $224.50 in late trading, after the company this afternoon delivered Q4 revenue and earnings per share that beat analysts’ expectations.

The company posted Q4 adjusted earnings of $0.33 per share, and non-GAAP revenue of $761 million (up 26% from Q3) on strong demand for its Model S electric car. This topped consensus for earnings of $0.21 per share, on non-GAAP revenue of $686 million, according to a consensus estimate from Thomson Reuters. Q4 non-GAAP net income was $46 million.

Including items, the green automaker headed by billionaire Elon Musk reported a net loss of $0.13 per share. Its net loss dropped to $16.2 million from $90 million on a year-over-year basis. Tesla said it had free positive cash flow of $40 million in the quarter.

For the year the company said it delivered 22,477 Model S sedans, raking in $2.5 billion in revenues. Tesla also announced an upcoming expansion in output. Model S production is expected to rise at a rate of 600 per week to start the year, reaching 1,000 per week by year end. Tesla however, warns that it expects to be constrained by tight battery supplies during the first half of 2014, but expects the shortage to ease by the second half.

Tesla’s forecast for next year calls for deliveries of 35,000 vehicles, an increase of more than 55+% from the 22,477 it delivered last year. The Palo Alto, California-based company notes in a letter  to its shareholders that it expects to make 7,400 cars this quarter against just 6,587 in the one that just ended. But “as the number of cars in transit to Europe and Asia must grow substantially to support those markets, we plant to deliver approximately 4,400 vehicles in Q1,” CEO Musk said in a letter to shareholders.

Wedbush analyst Craig Irwin told Reuters “the company’s average selling prices were about 10 percent higher than expected during the quarter, and that investors were pleased with the company’s stellar outlook for 2014.”

“The cover is off the ball,” he said.

Tesla also said it sees costs rising this year.

“Operating expenses and capital expenditures will increase significantly in 2014, as we plan to invest in the long term growth of Tesla,”  management said in the letter. “We plan to expand production capacity for Model S and Model X, invest in our store, service and Supercharger infrastructure, complete the development of Model X and start early design work on our third generation car.”

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