© Reuters. Tesla (TSLA) tops fourth quarter with a 37% increase in revenue
By Geoffrey Smith
Investing.com — Shares of Tesla (NASDAQ:) rose more than 7% in premarket trading on Thursday after the electric vehicle maker insisted there is no problem with demand for its cars and forecast another year of solid growth, if a bit slower.
Tesla’s underlying earnings per share of $1.19 in the fourth quarter, slightly above consensus of $1.15, which had been revised sharply lower late last year as the company struggled with outages. production and logistics at its plant in Shanghai. Such issues were partly responsible for the company’s revenue falling slightly short of market estimates of just $24.32 billion.
More importantly, Chief Executive Elon Musk said on an analyst call after the launch that the price cuts announced earlier this month have had a clear impact on demand, which he said is now running at twice the capacity of current Tesla production.
Tesla had cut prices on most of its cars by as much as 20% in early January, a move that reflects increased competition and affordability issues as consumers around the world battle the highest inflation in decades.
The price cuts were amplified by the fact that they brought some of their models below the price threshold required to qualify for federal subsidies introduced by the Biden administration last year. The lower prices add to the pressure on Tesla’s operating margins, which fell to 16% in the fourth quarter. Nonetheless, Musk forecast that operating margin in his core business of auto sales would remain above 20% this year, well above industry averages.
“Given the increased focus on the implications of the recent price cuts on demand and gross margins, the management of The comments are likely to be met with some relief, as they inject someI needed visibility,” said Citigroup analysts, who raised their price target on the shares to $146 from $137 after the news.
A negative takeaway from the conference call was Musk’s forecast for the current year, which at 1.8 million cars fell short of analyst forecasts of 1.9 million and also clearly falls short of his target. annual growth of 50%.
Musk did not specify whether he was talking about production or deliveries.
As of 05:26 ET (1026 GMT), Tesla shares were up 7.1% in premarket trading, on track for their highest open in more than a month.
