Tesla Inc. stock fell late Wednesday after the electric-vehicle maker reported quarterly profit and sales well above Wall Street expectations, but said its factories have been running below capacity for several months due to to supply-chain snags likely to continue through the year.
Tesla
TSLA,
+2.07%
said it earned $2.3 billion, or $2.05 a share, in the fourth quarter, compared with 24 cents a share in the year-ago period. Adjusted for one-time items, the company earned $2. 54 a share in the quarter.
Sales rose 65% to $17.7 billion, from $10.7 billion a year ago.
Wall Street analysts surveyed by FactSet expected the electric-car maker to report adjusted earnings of $2.36 a share on sales of $17.1 billion in the quarter.
“The chip shortage, while better than last year, is still an issue,” and there are “multiple supply-chain challenges” that are on-going, Chief Executive Elon Musk said in a call with analysts following the results.
Nonetheless, “we do expect significant grown in 2022 … comfortably above 50% growth in 2022,” he said.
In a letter to investors, the company said that its factories “have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022.”
“We aim to increase our production as quickly as we can, not only through ramping
production at new factories in Austin and Berlin, but also by maximizing output from our established factories in Fremont and Shanghai,” it said.
Some may view the comments about the ongoing supply-chain constraints and below-capacity factories as “a modest disappointment,” but Tesla “has become masterful at underpromising and overdelivering and has now beat in nine of the past 10 quarters,” CFRA analyst Garrett Nelson said.
Tesla’s full-year GAAP profit rose to $5.5 billion from $721 million in 2020, while 2021 sales rose 71% to $53.8 billion, from $31.5 billion in 2020. Tesla said it ended the quarter with $2.8 billion in free cash flow. Total debt excluding vehicle and energy-product financing fell to $1.4 billion at the end of the year, it said.
The quarter was marred by “a continuation of global supply-chain, transportation, labor and other manufacturing challenges, limiting our ability to run our factories at full capacity,” Tesla said.
The company said it started building Model Ys in late 2021 at its factory in Austin, Texas, and plans to start deliveries of the compact SUV after final certifications. The Tesla Fremont factory in the San Francisco Bay Area reached “record production” last year, and could expand its capacity beyond 600,000 vehicles a year, Tesla said.
The goal is to maximize output from Fremont while Austin and the Berlin, Germany, plant are ramping up. The Berlin factory is still awaiting manufacturing permits from local authorities, Tesla said. The Shanghai plant “continues to be our main export hub,” it said.
Tesla kept its guidance of 50% average annual sales growth.
Officially “cutting the red ribbon on Austin and Berlin over the coming months will be key,” Wedbush analyst Dan Ives said in a note. By the end of 2022 Tesla likely will have the capacity for about 2 million vehicles a year, from roughly 1 million now, he said.
Tesla surprised Wall Street earlier this month with record fourth-quarter sales, which surged nearly 90% from the same period in 2020.