Tesla's 1st Profit Blows Away Expectationshttp://www.fool.com/investing/general/2013/05/08/teslas-1st-profit-blows-away-expectations.aspx John Rosevear
May 8, 2013
Tesla Motors (NASDAQ: TSLA) announced a first-quarter profit of $15 million, excluding some items, late on Wednesday, a result driven by strong sales of the company's award-winning Model S sedan.
Tesla's $0.12 per-share profit was well above Wall Street's consensus expectation of $0.04 a share, according to Thomson Reuters. Needless to say, it was also a huge improvement over Tesla's $0.76-per-share loss in the year-ago quarter.
Shares moved sharply higher in after-hours trading on the news.
Tesla's first-ever profit comes on stronger-than-expected sales
Tesla said that it produced more than 5,000 Model S sedans during the first quarter, and that it "recognized 4,900 vehicles as revenue," meaning that they were fully paid for and delivered to customers.
That's a strong result. CEO Elon Musk said in a statement that it was made possible by Tesla's focus on improving production efficiency, something that in turn was made possible as the company's processes (and its suppliers) got up to full speed. That focus on improvement led to a 40% decline in the time required to build a Model S between December and March, Musk said.
A big jump in revenue driven in part by sales of tax credits
Tesla also continues to work with Mercedes-Benz on development of a small electric car; that work generated $7 million in revenue during the quarter, Musk said.
Tesla acknowledged that it had made $68 million, or 12% of its total revenue during the quarter, via the resale of "Zero Emission Vehicle," or ZEV, tax credits issued by the state of California.
Analysts had recently speculated that the sale of ZEV credits could account for a significant portion of Tesla's earnings. Under California's arcane green-car laws, Tesla receives a credit for about half of the cars it sells. It then resells its credits to other automakers who don't yet meet California's ZEV sales requirements. Tesla s