Electric automaker Tesla confirmed it will be able to make a key debt payment by next month's deadline, taking some pressure off CEO Elon Musk.
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The automaker reported free cash flow of $910 million noting, "We have sufficient cash on hand to comfortably settle in cash our convertible bond that will mature in March 2019" in its earnings release.
We have sufficient cash on hand to comfortably settle in cash our convertible bond that will mature in March 2019.
FOX Business recently reported that the company was likely to meet this deadline, which had been a concern among investors. Shares have fallen 10 percent this year.
The disclosure comes amid mixed quarterly results. The company's adjusted profit was $1.92, versus estimates of $2.20 per share. Slightly lower profits come as the company faced the reduction of a key federal tax credit at the outset of 2019.
However, Tesla said it expects to turn a profit in each quarter of 2019. In terms of revenue, the company beat expectations, reporting $7.23 billion in the fourth quarter, compared with estimates of $7.08 billion.
As for production, the electric automaker said it hopes to achieve a Model 3 production rate of 7,000 vehicles per week by the end of the year. It expects to deliver between 360,000 to 400,000 vehicles in 2019, an increase of as much as 65 percent when compared with last year.
In a note sent to employees earlier this month, which detailed plans to cut another 7 percent of the company’s workforce, Musk outlined a number of headwinds and resulting expectations to generate a “tiny profit” in the fourth quarter with “great difficulty, effort and some luck.”
The company had already released fourth-quarter delivery figures of 90,700 vehicles – another new record for the company – which included 63,150 Model 3s. In the same period a year earlier, Tesla delivered just 1,550 Model 3s.
Tesla swung to a profit in the third-quarter, fulfilling a promise to do so by the end of 2018.
Questions remain, however, as to whether the company can continue turning a profit. It has embarked on a number of cost-cutting initiatives amid an effort to bring down the price of its flagship Model 3 sedan. Musk promised a version of the vehicle with a base price of $35,000 as a means to bring the luxury electric vehicle to the mass market. The company unveiled a slightly cheaper version of the car last year, with a sticker price around $45,000.
Tesla customers also lost a key tax credit at the outset of this month, which was reduced to $3,750 from $7,500. The full credit is only available while a manufacturer maintains sales below 200,000— a threshold Tesla surpassed over the summer.