Tesla reports smaller Q4 profit than previous quarter

Tesla reports smaller Q4 profit than previous quarter

The Palo Alto, Calif., auto maker reported fourth-quarter earnings per share of $1.93 on an adjusted basis, below Wall Street's forecast for $2.20 a share.

The departure of Deepak Ahuja as well as missing Wall Street profit targets for the end of 2018, sent Tesla shares down almost 6 percent after hours. In this, it'll be something more aligned with the Model X SUV's pricing.

Deepak Ahuja is to retire, chief executive Elon Musk told investors on the quarterly earnings call, and will be replaced by current head of finance Zach Kirkhorn, who has been with the company for nine years. But its revenue came in line with forecast, it has more cash and can meet its upcoming bond payment, and Musk says profits, even if small, will continue through each quarter this year.

It forecast strong growth, as Model 3 vehicle sales start in Europe and China.

Roth Capital Partners analyst Craig Irwin called Tesla's results "somewhat weak, but largely as expected", and expressed disappointment that the company did not announce it would soon begin building a $35,000 version of its Model 3. Additionally, Tesla said it delivered 27,607 Model S and Model X vehicles to customers in the fourth-quarter. This projection is slightly behind schedule when compared to Musk's previous commentary in mid-2017, when he had asserted that investors should have "zero" doubt that Model 3 production would hit 10,000 per week in 2018.

The cheapest today is priced at $44,000. "I think that's not bad", he said.

"We're optimistic about being profitable in the first quarter, not by a lot", he said, "and for all quarters going forward".

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Add to that the Shanghai Gigafactory which is expected to go into full production rolling 3,000 Model 3s off the factory floor a week by the end of 2019.

Earlier this month, Tesla said it would stop making Model S and Model X vehicles with a 75 kWh battery pack, which had starting prices of $76,000 and $82,000, respectively - thereby setting new prices at the time at less-accessible $94,000 and $97,000 entry points.

The winding down of a US tax subsidy this year will make all Tesla cars more expensive and could hurt sales.

A 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018.

Tesla made a profit of $139.5m (£106.4m) in the three months to 31 December - avoiding a loss for a second quarter in a row.

The carmaker delivered adjusted earnings of $1.93 per share for the fourth quarter, falling below consensus estimates of $2.14 per share, according to Bloomberg data.

Tesla announced Wednesday that it sees 2019 total deliveries in the range of 360,000 to 400,000.

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