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Tesla misses on earnings, expects 50% average annual growth in deliveries going forward

Tesla missed on earnings but reported positive cash flow and said it expects to increase vehicle deliveries by 50% each year going forward.



Tesla reported quarterly results after the bell, missing analysts’ estimates on earnings but notching another profitable quarter for the electric vehicle and solar business.

Shares were down about 5% after hours following an earnings call to discuss the quarter and year ahead.

Here are the results, versus what analysts were expecting according to estimates compiled by Refinitiv:

  • Earnings: 80 cents adj. vs $1.03 per share expected
  • Revenue: $10.74 billion vs $10.4 billion expected

The company also gave some guidance on sales going forward, writing “Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries.” Tesla expects faster delivery growth than that for 2021, with two new factories expected to come online this year and updated versions of its Model S and X vehicles now in early stages of production.

CEO Elon Musk said on the call Wednesday that deliveries of the updated version of Model S would begin in February.

Tesla also plans to make its premium driver assistance software, marketed as the Full Self Driving option, available on a subscription basis. That means drivers won’t have to pay the high up-front price of $10,000 to use FSD if they want it.

Musk also said that drivers who previously purchased FSD for their Tesla vehicle could not transfer the software to another Tesla, should they buy another. The price of the software is included in the value of a trade-in by Tesla he said, but not transferable.

Gross margins reached 19.2% for Tesla in the fourth quarter of 2020, the lowest since the last quarter of 2019. Capital expenditures hit $1.15 billion for the period ending Dec. 31.

The company also reported positive free cash flow for 2020 of $2.79 billion, more than double its 2019 figure of $1.08 billion.

Tesla previously said it had delivered 499,550 vehicles in 2020, falling barely shy of its guidance for half a million vehicle deliveries in 2020. (Deliveries are the closest approximation of sales numbers disclosed by Tesla.) It produced 509,737 vehicles during the year.

Both deliveries and production numbers set a new record for the maturing electric car company, seen as a triumph in a year when auto sales and factory operations were dampened by a global pandemic.

Automotive revenue grew to $9.31 billion in Q4, while revenue from energy generation and storage reached $752 million, and services and other revenue grew to $678 million. “Other” revenue includes sales of Tesla merchandise including the company’s own tequila, apparel and more essential vehicle accessories like car charging adapters.

Tesla spent $522 million on research and development and nearly a billion on SG&A, sales, general and administrative costs in the last quarter of 2020.

Looking ahead, Tesla said it would begin producing its newest model — the crossover SUV known as the Model Y — at new plants in Austin, Texas, and Brandenburg, Germany, in 2021. Tesla intends to incorporate its own new “tabless” battery cells, which it unveiled at an annual shareholder meeting and battery presentation in September last year in those vehicles.

Photos from Tesla’s Q4 2020 earnings report, released Jan. 27, 2021, show progress on the company’s new factory near Austin, Texas.


Tesla’s factory near Berlin under construction in this photo from the company’s Q4 2020 earnings report, released Jan 27, 2021.


Wednesday’s report is Tesla’s first since its addition to the S&P 500.

Vehicle sales in China largely enabled Tesla to hit record deliveries in 2020. So did the introduction of a new crossover SUV, the Model Y, which Tesla began to produce in serious volumes in the first quarter last year out of its Fremont, California car plant.

In the fourth quarter, after multiple price cuts and a shift from selling more expensive Model S and X vehicles to cheaper Model 3 and Y vehicles, including in China, Tesla’s average sales price dipped by about 11%.

Since Tesla’s third quarter earnings call in October, the price of the company’s stock has more than doubled, giving it a market capitalization of more than $800 billion and making it the fifth-most valuable company in the U.S.

Even so, Musk said “the stock market undervalues how good FSD is going to be.” He said Tesla’s robotaxi technology, still in development, helps justify the company’s massive valuation.

The company also gave some guidance on sales going forward, writing “Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries.” Tesla expects faster delivery growth than that for 2021, with two new factories expected to come online this year and updated versions of its Model S and X vehicles now in early stages of production.



Fed Chief Powell, other officials owned securities central bank bought during Covid pandemic

Federal Reserve Chairman Jerome Powell owned municipal bonds of the same type bought by the Fed during the coronavirus pandemic.



Amid an outcry about Federal Reserve officials owning and trading individual securities, an in-depth look by CNBC at officials’ financial disclosures found three who last year held assets of the same type the Fed itself was buying, including Chairman Jerome Powell.

None of these holdings or transactions appeared to violate the Fed’s code of conduct. But they raise further questions about the Fed’s conflict of interest policies and the oversight of central bank officials.

  • Powell held between $1.25 million and $2.5 million of municipal bonds in family trusts over which he is said to have no control. They were just a small portion of his total reported assets. While the bonds were purchased before 2019, they were held while the Fed last year bought $21.3 billion in munis, including one from the state of Illinois purchased by his family trust in 2016.
  • Boston Fed President Eric Rosengren held between $151,000 and $800,000 worth of real estate investment trusts that owned mortgage-backed securities. He made as many as 37 separate trades in the four REITS while the Fed purchased almost $700 billion in MBS.
  • Richmond Fed President Thomas Barkin held $1.35 million to $3 million in individual corporate bonds purchased before 2020. They include bonds of Pepsi, Home Depot and Eli Lilly. The Fed last year opened a corporate bond-buying facility and purchased $46.5 billion of corporate bonds.

Among those questions: Should the Fed have banned officials from holding, buying and selling the same assets the Fed itself was buying last year when it dramatically widened the types of assets it would purchase in response to the pandemic?

The Fed’s own code of conduct says officials “should be careful to avoid any dealings or other conduct that might convey even an appearance of conflict between their personal interests, the interests of the system, and the public interest.”

In response to CNBC questions asked in the process of our research, a Fed spokesperson released a statement Thursday saying Powell ordered a review last week of the Fed’s ethics rules surrounding “permissible financial holdings and activities by senior Fed officials.”

A Fed spokesperson told CNBC that Powell had no say over the central bank’s individual municipal bond purchases and no say over the investments in his family’s trusts. A Fed ethics officer determined that the holdings did not violate government rules.

Barkin declined to comment.

Rosengren has announced he would sell his individual positions and stop trading while he is president. Dallas Fed President Robert Kaplan, who actively traded millions of dollars of individual stocks, also said he would no longer trade and would sell his individual positions. But he said his trade did not violate Fed ethics rules.

A spokesman for Rosengren told CNBC that he “made sure his personal saving and investment transactions complied with what was permissible under Fed ethics rules.”

But Dennis Kelleher, CEO of the nonprofit Better Markets, said if some of these Fed actions are not against the rules, the rules need to change.

“To think that such trading is acceptable because it is supposedly allowed by Fed’s current policies only highlights that the Fed’s policies are woefully deficient,” Kelleher told CNBC.

While trading by Rosengren and Kaplan was not conducted during the so-called blackout period, when Fed officials are not allowed to talk publicly about monetary policy or trade, Kelleher said during a crisis like last year, “the whole year should be considered a blackout period” because Fed officials are constantly talking and crafting policy in response to fast-moving events.


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Affirm stock skyrockets after company reports 71% revenue growth and strong guidance

The blockbuster earnings report comes after Affirm last month announced it’s teaming up with Amazon to launch a buy now, pay later checkout option on the site.



Affirm Holdings Inc. website home screen on a laptop computer in an arranged photograph taken in Little Falls, New Jersey, U.S., on Wednesday, Dec. 9, 2020.

Gabby Jones | Bloomberg | Getty Images

Affirm reported better-than-expected fiscal fourth-quarter results after the bell Thursday, including solid guidance and 71% revenue growth.

The stock soared more than 20% in extended trading following the report.

Here’s how the company did:

  • Revenue: $261.8 million vs. $225 million expected, according to a Refinitiv survey of analysts
  • Loss per share: 48 cents per share, which is not comparable to estimates

Affirm is one of the leading players in the burgeoning buy now, pay later space, which allows people to split the payment for their purchases into installments. Founded in 2013 by PayPal co-founder Max Levchin, Affirm made its stock market debut in January, with shares beginning trading at $90.90, after listing at $49 a piece.

Affirm gave upbeat guidance for the current quarter. It expects revenue for the fiscal first quarter of 2022 to come in at $240 million to $250 million, which surpassed analysts’ estimates of $233.9 million.

The company had 7.1 million active customers as of the fourth quarter, up from 5.4 million in the previous period.

The blockbuster earnings report comes after Affirm last month announced it’s teaming up with Amazon to launch the e-commerce giant’s first partnership with an installment payment player. The partnership allows Amazon customers in the U.S. to split purchases of $50 or more into smaller, monthly installments.

When asked how the partnership with Amazon came together, Levchin said on a call with investors that large retailers are realizing the buy now, pay later trend isn’t just a fad or a feature. “They look to us as a provider,” Levchin said.

In the earnings report, Affirm said its guidance for the full year and fiscal first quarter doesn’t factor in any potential contributions to revenue or gross merchandise volume from the partnership with Amazon, which is currently being tested with select customers before rolling out more broadly in the coming months.

— CNBC’s Kate Rooney contributed to this report.


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Oracle falls short on revenue as it ramps up cloud investment

While Oracle has been investing more in capital expenditures to meet expected demand for cloud services, revenue fell short of estimates in multiple segments.



Oracle CEO Safra Catz delivers a keynote address during the 2019 Oracle OpenWorld on September 17, 2019 in San Francisco, California. Oracle CEO Safra Catz kicked off day two of the 2019 Oracle OpenWorld with a keynote address. The annual convention runs through September 19.

Justin Sullivan | Getty Images

Oracle shares fell as much as 3% in extended trading on Monday after the enterprise software maker reported fiscal first-quarter revenue that came in under analysts’ expectations.

Here’s how the company did:

  • Earnings: $1.03 per share, adjusted, vs. 97 cents per share as expected by analysts, according to Refinitiv.
  • Revenue: $9.73 billion, vs. $9.77 billion as expected by analysts, according to Refinitiv.

Revenue increased by 4% year over year in the quarter, which ended on Aug. 31, according to a statement. In the previous quarter Oracle’s revenue had gone up 8%.

With respect to guidance Oracle CEO Safra Catz said she sees fiscal second-quarter earnings of $1.09 to $1.13 in earnings per share on 3% to 5% revenue growth.. Analysts polled by Refinitiv are expecting fiscal second-quarter adjusted earnings of $1.08 per share and $10.25 billion in revenue, which works out to almost 5% revenue growth.

“Cloud is fundamentally a more profitable business compared to on-premise, and as we look ahead to next year, we expect company operating margins will be the same or better than pre-pandemic levels,” Catz said. Oracle does not disclose revenue or operating income from cloud infrastructure or cloud applications.

Oracle’s largest business segment, cloud services and license support, generated $7.37 billion in revenue, which is up 6% and below the StreetAccount consensus estimate of $7.41 billion.

The cloud license and on-premises license segment contributed $813 million in revenue, down 8% and lower than the $859.7 million consensus. Oracle’s hardware unit had $763 million in revenue, down 6% and less than the $778.5 million estimate.

Oracle boosted its capital expenditures above $1 billion, compared with $436 million in the year-ago quarter. The investment comes after executives signaled they wanted to have the infrastructure necessary to meet expected cloud demand. Cloud infrastructure and cloud applications now represent 25% of total revenue, Oracle said in the statement.

In the quarter Oracle announced a support rewards program designed to encourage customers to adopt its public cloud services, and S&P Global Ratings lowered its rating on Oracle and its debt to BBB+.

Oracle shares have risen 37% since the start of the year, while the S&P 500 index is up about 19% over the same period.

WATCH: Bulls bet on Fluor. Plus, an update on Oracle calls

Here’s how the company did:


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