Tesla posts first annual profit

Riding a sales surge amid a global pandemic, Tesla Inc. on Wednesday reported that it posted its first annual net profit in 2020.

In a year that saw its stock soar to make it the world’s most valuable automaker, Tesla earned $721 million, capped by a $270 million profit in the fourth quarter. It was the company’s sixth straight quarterly net profit after years of mostly losses.

A year earlier, Tesla lost $862 million. Data provider FactSet says 2020 ended a string of annual red ink that began in 2006.

Once again the company needed regulatory credits purchased by other automakers in order to make a profit. Without $1.58 billion in credits for the year, Tesla would have lost money. Other automakers buy the credits when they can’t meet emissions and fuel economy standards.

Tesla said that excluding special items, it made $2.24 per share for the year, falling short of Wall Street expectations of $2.45. Full-year revenue was $31.54 billion, beating estimates of $31.1 billion.

From October through December, the company made an adjusted 80 cents per share, below Wall Street estimates of $1.02. Fourth-quarter revenue was $10.74 billion, surpassing estimates of $10.47 billion.

The per-share earnings misses sent shares of the Palo Alto, California-based company down almost 3% in extended trading after the earnings announcement.

Tesla said in its investor letter that over a “multi-year horizon,” it expects 50 per cent growth in annual vehicle deliveries. Some years, like 2021, may see faster growth, it said.

Tesla also said its operating profit margin will keep growing as factory capacity expands.

Tesla’s vehicle sales rose 36% last year, but the company fell just short of its annual goal to deliver 500,000 vehicles. The company delivered 499,500 vehicles for the year.

The sales jump came even though Tesla was forced to close its only U.S. assembly plant for almost two months.