Tesla (TSLA) stock drops as Q4 2020 earnings results on EPS miss

Tesla just dropped it's Q4 2020 earnings results. Let's take a look.

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Tesla just released it’s Q4 2020 earnings report, resulting in an after-hours price drop on the stock market following a miss on the company’s estimated earnings-per-share (EPS). Despite not hitting the EPS for Q4 of 2020, Tesla did manage to end the quarter with a higher revenue of $10.7B compared to its estimated $10.1B. The report also brought news that Tesla would be refreshing the Model S (originally released in 2012) and the Model X.

Tesla Earnings report - Model S getting updated

Tesla’s Q4 2020 Earnings Release

The following is pulled directly from Tesla's Q4 2020 earnings release:

Highlights

  • Cash
    • Operating cash flow less capex (free cash flow) of $2.8B in 2020
    • $4.9B increase in our cash and cash equivalents in Q4 to $19.4B
    • Free cash flow $1.9B in Q4
  • Profitability
    • $721M GAAP net income; $2.5B non-GAAP net income in 2020
    • $270M GAAP net income; $903M non-GAAP net income (ex-SBC*) in Q4
    • $575M GAAP operating income; 5.4% operating margin in Q4
    • SBC expense increased to $633M in Q4
  • Operations
    • Half a million vehicles produced and delivered in 2020
    • Model Y production at Gigafactory Shanghai started in December 2020
    • Updated Model S and Model X launched in January 2021

Summary

This past year was transformative for Tesla. Despite unforeseen global challenges, we outpaced many trends seen elsewhere in the industry as we significantly increased volumes, profitability and cash generation.

For the full year 2020, we achieved an industry-leading1 6.3% operating margin (despite an increase of SBC to $1.7B). Teams across our organization, including supply chain, manufacturing, logistics and delivery, rose to the occasion to ensure strong execution.

In addition, we continued to improve our products and make progress on our long-term roadmap. We ramped Model 3 in China to over 5,000 cars per week and started production of Model Y at Gigafactory Shanghai less than a year after breaking ground on the expansion. We also launched and ramped Model Y in Fremont in 2020.

In Berlin and Austin, we remain on track to start vehicle production this year with structural batteries leveraging in-house battery cells. Our engineering team has made significant progress on Full Self Driving

(FSD) software, with a limited release to customers. Finally, we are excited to ramp the updated Model S and Model X and deliver our first Tesla Semi by the end of the year.

While 2020 was a critical year for Tesla, we believe that 2021 will be even more important. Thank you for your trust and support and for being on this journey with us.

Outlook

  • Introduction
    • Given the number of significant projects in the pipeline, we have simplified our approach to guidance for 2021, enabling our teams to remain focused on achieving our long-term goals.
  • Volume
    • We are planning to grow our manufacturing capacity as quickly as possible. Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. In some years we may grow faster, which we expect to be the case in 2021.
    • The rate of growth will depend on our equipment capacity, operational efficiency and capacity and stability of the supply chain.
  • Cash
    • We have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses.
  • Profit
    • We expect our operating margin will continue to grow over time, continuing to reach industry-leading levels with capacity expansion and localization plans underway.
  • Product
    • We are currently building Model Y capacity at Gigafactory Berlin and Gigafactory Texas and remain on track to start deliveries from each location in 2021. Gigafactory Shanghai will continue to expand further through the course of the year. Tesla Semi deliveries will also begin in 2021.

Check out the full press release on the official Tesla Investors Relations website for more info.


It's neat to see Tesla going back to the Model S and Model X to refresh them, and we're intrigued to see how people will react to the changes. For more earnings results from other companies, make sure you check out our video game and tech companies Q1 2021 earnings release schedule.

Guides Editor

Joshua holds a Bachelor of Fine Arts in Creative Writing and has been exploring the world of video games for as long as he can remember. He enjoys everything from large-scale RPGs to small, bite-size indie gems and everything in between.

From The Chatty
  • reply
    January 27, 2021 1:26 PM

    Josh Hawkins posted a new article, Tesla (TSLA) stock drops as Q4 2020 earnings results on EPS miss

    • reply
      January 27, 2021 1:29 PM

      Love the negative headline for a record year, you shorting Tesla or something?

      • reply
        January 27, 2021 1:31 PM

        And they are updating the X as well, not just the S

      • reply
        January 27, 2021 1:41 PM

        Nope, just reporting the news. I don't have any money invested in Tesla.

        • reply
          January 27, 2021 1:45 PM

          Then why the negative headline spin on a record setting earnings report?

          • reply
            January 27, 2021 1:57 PM

            Because that was the news. The stock dropped based on the EPS estimate being missed. Sure, everything else was record-setting, but that doesn't change that the stock dropped because the EPS was missed.

            The article touches on the other information as well. We didn't leave it out.

            • reply
              January 27, 2021 2:00 PM

              Your headline is accurate. Don't worry.

              (I mean, I'm sure it will bounce back, 'cause like...STONKS, but you reported what happened!)

              • reply
                January 27, 2021 2:28 PM

                Yeah, I'm sure it will bounce back. But that was the report at the time. /shrug

            • reply
              January 27, 2021 2:03 PM

              I would think the news of this last year's performance is the bigger overall story than small dip in the stock.

              Just disheartening to see this amazing success being painted with a negative headline.

              • reply
                January 27, 2021 2:10 PM

                you can have a record setting performance but if it's still below expectation then your results will be reported negatively and rightly so, because you didn't do as well as everyone expected. A company isn't judged merely by 'well you did better than last time'.

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                January 27, 2021 2:12 PM

                disheartening? really?

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                  January 27, 2021 2:32 PM

                  Sure, watching folks put a negative spin on record successes is disheartening.

                  • reply
                    January 27, 2021 3:01 PM

                    You are insane. It's news not a history lesson.

                    • reply
                      January 27, 2021 3:24 PM

                      You mean the history of this afternoons earning report?

                  • reply
                    January 27, 2021 3:07 PM

                    wtf... lol

                  • reply
                    January 27, 2021 4:13 PM

                    they had an earnings miss. every company does that sometimes and there are articles like this right after. it's not negative spin....

              • reply
                January 27, 2021 3:38 PM

                the story is the earnings call for the previous quarter, not the entire year.

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                  January 27, 2021 3:48 PM

                  Yep, the story is vaguely about the record earnings report (which addresses both the recent quarter and year) yet the negative article headline title is about the 2% drop stock just this afternoon.

                  Nothing at all was mentioned when they were up over 100% over the last 3 or so months.

              • reply
                January 27, 2021 5:37 PM

                lmao wtf dude. Stock dropped on earnings, presumably because news was already baked in after the last push. Relax

          • reply
            January 27, 2021 2:00 PM

            Have you let all the other outlets with similar headlines know how mean they are and inquired about their short holdings?

            Did TSLA miss EPS estimates? Yes.

            Is the stock currently down in after hours trading? Yes.

            • reply
              January 27, 2021 2:04 PM

              nope, why do ya ask?

              • reply
                January 27, 2021 2:21 PM

                You seem to have a disturbing emotional connection to a car manufacturer, it's weird to attack someone over a factually correct headline and then follow that up with a transparent accusation that the headline's intent was the author's personal financial gain.

                • reply
                  January 27, 2021 2:31 PM

                  While "factually correct" it is by no means the main takeaway from today's event.

                  The writer chose to write a negative headline which highlights two small (and somewhat ephemeral) facts while burying the real news within the article of amazing success being reported.





                  • reply
                    January 27, 2021 2:43 PM

                    reporting that a company failed to meet earnings expectations is like incredibly standard practice, that's why earnings expectations exist

                  • reply
                    January 27, 2021 3:25 PM

                    It is for stock holders

                • reply
                  January 27, 2021 3:08 PM

                  god lord musk is disappoint

          • reply
            January 27, 2021 2:38 PM

            Expectations

          • reply
            January 27, 2021 5:16 PM

            Negative news get more clicks.

        • reply
          January 27, 2021 2:27 PM

          Your boss does.

          • reply
            January 27, 2021 2:32 PM

            And? Not to be rude or anything, but I'm not sure what that has to do with the story that I reported.

      • reply
        January 27, 2021 3:03 PM

        Are you a major investor or something

    • reply
      January 27, 2021 2:04 PM

      thank you stonknews

    • reply
      January 27, 2021 2:05 PM

      https://imgflip.com/i/4vkyk3

      • reply
        January 27, 2021 3:10 PM

        0-60 in <1.99s woah

      • reply
        January 27, 2021 3:40 PM

        Still not as clean as the model 3. Get rid of the instrument cluster and put a normal steering wheel and then it's great.

      • reply
        January 27, 2021 3:54 PM

        The Witcher, really?

        • reply
          January 27, 2021 3:58 PM

          They did tease that previously (Elon's Fave Game) so i guess it is confirmed

    • reply
      January 27, 2021 2:59 PM

      Is this still a video game website?

      • reply
        January 27, 2021 3:01 PM

        There's video games on the dashboard screen!

        • reply
          January 27, 2021 3:09 PM

          Move over Nintendo Switch, we've got a new portable console.

      • reply
        January 27, 2021 3:11 PM

        You can play Cuphead on the Telsa display, so yes.

      • reply
        January 27, 2021 4:19 PM

        They announced they would be covering stuff like this a long time ago. Not new.

      • reply
        January 27, 2021 4:41 PM

        check your filters?

      • reply
        January 27, 2021 5:24 PM

        You need money to play video games. Better get in on this at the ground floor.

      • reply
        January 27, 2021 5:45 PM

        [deleted]

    • reply
      January 27, 2021 3:40 PM

      My calls expiring Friday are hurting my butthole

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