Tesla TSLA to Achieve First Full Year of Profitability, Analysts Expect

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After the close of trading on Wednesday, January 27, Tesla (NASDAQ: TSLA) will be holding its Q4 2020 Earnings Call. The company is expected to report its first full-year earnings, which will mark an important milestone on the company's path to further growth.

In Q4 2020, Tesla delivered a record high number of vehicles, making it possible to achieve the 2020 target of a half-million vehicle deliveries. Wall Street expects this resilience to help Tesla generate around $1.3 billion in 2020 annual profit, according to FactSet, on sales of about $31.1 billion. That compares with an $862 million loss in 2019 on sales of $24.6 billion, according to The Wall Street Journal.

Despite the consequences of the Covid-19 pandemic, Tesla made profits throughout the first three quarters of the year. To do this, the CEO of the company, Elon Musk, was forced to enter into a confrontation with the California authorities, who had blocked the work of the factory, despite the fact that other automakers in the US could resume working. Although the pandemic hit the economic health of all countries hard, interest in Tesla's products remained high.

The performance that the young company achieved, coupled with investor enthusiasm for electric vehicles, saw its stock soar 740% last year, making Tesla the world's most valuable car manufacturer. The company's success also earned Tesla a spot in the S&P 500.

Wall Street forecasts Tesla will report a record quarterly profit of around $746 million in Q4, up from $105 million a year earlier. Sales for the October-December quarter are expected to be roughly $10.5 billion, up around 40%, according to FactSet.

Tesla's financial results have been buoyed by the sale of regulatory credits to rival automakers that need them to comply with emissions-related rules. Such sales brought in nearly $1.2 billion in the first three quarters of last year, up from $594 million in all of 2019.

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