Tesla hits first profitable quarter ever
The electric car company's total revenue for the first quarter rose 83 percent over last quarter -- giving it adjusted earnings of 12 cents per share on revenue of $562 million.
In his quarterly earnings letter to shareholders on Wednesday, Tesla CEO Elon Musk announced that "Tesla reached profitability in the first quarter of 2013 for the first time in our 10-year history."
Not only did the electric car company exceed analyst expectations, but Musk said (PDF) Tesla even outdid its own expectations for deliveries and gross margin. The company reported adjusted earnings of 12 cents per share on revenue of $562 million, which is far higher than the expected 3 cents per share. Its profit was $11 million after charges.
Tesla's total revenue for the first quarter rose 83 percent from the fourth quarter, which is a record for the company. During the fourth quarter, Tesla lost $89 million after charges even though its sales soared 500 percent. At the time, the company said it planned to see a profit in the first quarter.
As far as production, Tesla built more than 5,000 Model S sedans in the first quarter and plans to do the same in the second quarter. For all of 2013, the company expects 21,000 deliveries, which is up from its earlier forecast of 20,000. These numbers are a lot higher than 2012, when the company planned to produce 5,000 Model S vehicles for the entire year.
Tesla began deliveries of its all-electric Model S last June. With its release, the Model S came out as the most practical electric car yet. Given its range and luxury sedan packaging, it was seen as becoming a daily driver for its owners. It also came with the added benefit of costing about a tenth less to run than a gasoline-engine car.
While it appears that Tesla is amping up Model S production, it's yet to start production on its latest Model X crossover electric vehicle. Originally, the company said it would begin production in late 2013 on the Model X, but last month the date was revised to late 2014.
For the company's next steps, Musk said that Tesla intends to spend $200 million on capital expenditures in 2013 and remains optimistic for the second quarter.
"Obviously, there is a huge amount of work ahead to improve the gross margin of Model S, but we have a clear road map to achieve component cost reductions, as well as achieve additional manufacturing and logistics efficiencies," Musk wrote. "As a result, we expect to achieve gross margin in the high teens in Q2."