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Tesla Motors announces surprise $16M loss in Q4

"Our customers have now driven their Tesla vehicles over 750 million miles. We are looking forward to achieving significant milestones in 2015, in addition to seeing our customers reach the billion miles driven mark," Tesla Motors said in a report to investors.

By Doug G Ware
Tesla Motors announces surprise $16M loss in Q4
Tesla Motors announced on Feb. 11 an unexpected net loss of $16 million in the fourth quarter of 2014, but offered shareholders optimism for 2015. Photo courtesy Tesla Motors

PALO ALTO, Calif., Feb. 11 (UPI) -- Tesla Motors posted an unexpected net loss for the fourth quarter of 2014, but it beat production estimates and stoked optimism for the remainder of 2015, the automaker announced Wednesday.

In its annual shareholder report, released after market close Wednesday, Tesla (NASDAQ: TSLA) reported a loss of $16 million in the December quarter -- which amounts to a loss of 13 cents per share. This came as a surprise to analysts, who expected the report to show per-share earnings of 30 cents or more, Forbes reported Wednesday.

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For the full year of 2014, Tesla reported its net income was $0.14 per share on a non-GAAP (Generally Accepted Accounting Principles) basis. But that figure turns into a loss of $2.36 using GAAP principles.

In better news, the automaker reported that it surpassed its production goal of 35,000 Model S vehicles for the year -- though it didn't sell them all, and about 1,400 of those units were not delivered on time.

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Tesla reported total non-GAAP revenue for 2014 at $1.1 billion, which was up 44 percent from 2013, but slightly below analyst expectation of $1.2 billion. Tesla reported the GAAP revenue at $957 million.

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Also noteworthy in the shareholder report was a stated 10 percent increase in revenue for the past 12 months -- well below the staggering 344 percent boom the automaker reported for 2013. And last May, the company's shares were downgraded to junk status by Standard & Poor's.

USA Today reported Wednesday that Tesla forecast a 70 percent jump in deliveries to buyers this year.

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Tesla shares ended Wednesday down $3.49 (1.6 percent) at $212.80. It dropped a bit further in after-hours trading to $204.50 per share. Investors traded below Tesla's Tuesday's close all day Wednesday and bottomed out at $207.38 per share.

Despite the surprise losses, Tesla CEO and chief product architect Elon Musk on Wednesday expressed continued optimism for the company in 2015. For the coming year, he expects to sell 55,000 vehicles -- including the Model S and the new Model X full-size crossover utility vehicle, with 60 percent of those selling in the second half of 2015.

"Our customers have now driven their Tesla vehicles over 750 million miles. We are looking forward to achieving significant milestones in 2015, in addition to seeing our customers reach the billion miles driven mark," the report to shareholders concluded. It was signed by both Musk and Tesla Chief Financial Officer Deepak Ahuja.

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Musk also specifically addressed concerns about slowing sales in China.

"Despite initial challenges in China, we remain convinced of the vast potential of this market and are concentrating our efforts on the cities we are in currently, before launching into new cities," he said in the letter to shareholders. "We now offer a turn-by-turn navigation option in China that we provided retroactively through a remote software upgrade to all our customers with appropriately optioned cars, and we believe our new executive seats and second row center console will be quite popular with new China customers."

Tesla also noted that construction of a battery plant near Reno, Nev., a partnership with Panasonic slated to open next year, is on schedule -- and the body for its new Model X will begin production in late summer.

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The Model S became the subject of safety criticism in late 2013 after a few owners reported experiencing fires that may have been related to the lithium ion battery. An investigation by Tesla and the National Highway Traffic Safety Administration led the automaker to install added protection and heightened under-body clearance beneath all Model S vehicles.

Tesla is currently developing another vehicle to succeed the Model X: The Model 3, initially called the Model E, is intended to be an entry-level Tesla vehicle with a 200-mile range and starting price of about $35,000, before government incentives. It is expected to begin delivery in 2017, though Musk has indicated that higher-than-expected popularity with the Model 3 could delay full production until perhaps 2020, the Los Angeles Times reported last month.

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