The electric car maker Tesla (NASDAQ:TSLA) went lower by 5% overnight this Wednesday after the release of its earnings which investors viewed as not so great.
Analysts anticipated Tesla would give results of $1.01 a share in pro forma profits for Q4 of 2020. But Tesla has stated it achieved only $0.80, and marked its quarterly sales at a surprising $1.07 billion — an increase of 46% year over year. This means the company’s Pro forma profits pretty much doubled (an increase of 95%), while the EV maker’s GAAP profits increased 118% to $0.24 a share.
GAAP profits — profits per diluted share according to accepted accounting calculations — have now been positive for 6 straight quarters for Tesla.
Last year was Tesla’s first to report GAAP profits and pro forma and for a full year. The year saw Tesla mark $31.5 billion in overall revenues, which is a 28% increase year-over-year. The GAAP profit margins also jumped to 21% after 3 years of falling. The EV maker’s net profit for the year of 2020 was $0.64 a share ($2.24 per share, pro forma).
2020 was also Tesla’s second fiscal year of making positive free cash flow. This measuring stick is important for a company that could raise capital through share issuances, though it doesn’t need to do this. Tesla produced $2.8 billion in profits last year, an increase of 158% from the $1.1 billion it generated in 2019. The company concluded 2020 with a total cash reserve of $19.4 billion.
This final total includes all $10 billion raised through share issuances of Tesla’s stock in Q4 of 2020.