Tesla's (TSLA -1.92%) highly anticipated fourth-quarter results were released after market close on Wednesday -- and they didn't disappoint. Revenue and adjusted earnings per share were both significantly ahead of estimates, even though analysts have already had most of the month to digest the financial implications of the electric-car maker's already-announced record quarterly deliveries.
The important quarterly update gave investors a timely window into Tesla's business as supply-chain issues continue to weigh on the company. Here's a quick look at a range of important takeaways from the earnings report, including revenue and earnings figures, vehicle-delivery guidance, updates on the company's new factories, and more.
Tesla Factory. Image source: The Motley Fool.
1. Soaring revenue and earnings
Tesla said its fourth-quarter revenue increased 65% year over year to $17.7 billion, driven primarily by a 71% jump in vehicle deliveries over this same time frame. Analysts, on average, were expecting revenue of about $16.6 billion. Non-GAAP (adjusted) earnings per share (EPS) increased 218% year over year to $2.54. GAAP EPS rose 754% to $2.05. Tesla's adjusted earnings per share of $2.54 was well ahead of the consensus analyst forecast for $2.36.
As the company said in its fourth-quarter earnings call:
2021 was a breakthrough year for Tesla. There should no longer be doubt about the viability and profitability of electric vehicles. With our deliveries up 87% in 2021, we achieved the highest quarterly operating margin among all volume OEMs, based on the latest available data, demonstrating that EVs can be more profitable than combustion engine vehicles.
2. Cash is piling up
Thanks to free cash flow of $2.8 billion during the quarter, the company's war chest of cash rose to $17.6 billion. It would have been higher, but the company made net debt repayments of $1.5 billion. Management noted that it now only has debt of $1.4 billion when excluding vehicle and energy-product financing.
3. Production capacity is increasing
Tesla said it wrapped up its fourth quarter with an annualized production run rate of 1.22 million vehicles. This is up from "over 1 million cars" toward the end of Q3, according to Tesla CFO Zach Kirkhorn's comments in the company's third-quarter earnings call.
4. New factories are coming online soon
Tesla said that its factory in Austin, Texas is in the final stages before volume production and deliveries from the factory begin. Similarly, equipment testing of vehicle production is underway at the company's new factory in Berlin. But Tesla is waiting on a manufacturing permit from local authorities to begin delivering German-made vehicles in Europe.
5. Vehicle-delivery guidance
Tesla reiterated its view for deliveries to average 50% growth over "a multi-year horizon," but management didn't specify what it expects for 2022. Tesla did say, however, that its "factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022."
