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Earnings Results: Tesla reports $2 billion Q4 profit, sales up 65%, but supply-chain snags crimp production

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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.

“Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022,” the company said in a letter to investors.

“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.”

Tesla’s history of breaking its own records continues, said iSeeCars.com analyst Karl Brauer.

“Every auto maker faced an uphill battle in 2021, but very few saw sales and revenue growth at this level,” he said.

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.

The company has scheduled a conference call with analysts at 5:30 p.m. Eastern. Chief Executive Elon Musk has signaled he’d be at the call.

Musk said last year he’d not be on the quarterly earnings calls “unless there’s something important I need to say,” and he was not on the EV maker’s third-quarter call in October.

The CEO tweeted in late November he’d provide “an updated product road map” on the fourth-quarter call, prefacing that by calling 2021 the year of “a supply chain nightmare & it’s not over!”

There have been reports the Cybertruck, an unconventional-looking electric pickup truck unveiled in 2019, has been delayed.

Tesla surprised Wall Street earlier this month with record fourth-quarter sales, which surged nearly 90% from the same period in 2020.

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