Tesla (TSLA) Stock Pummeled After Earnings

Shares of Tesla Motors Inc. (TSLA) was off -16.31 or -8.10 percent to 185.04 in pre-market trading on Thursday, after the company announced first quarter earnings late yesterday. Tesla announced a profit of +$17 million, versus $48.9 million in 2013â s fourth quarter. Tesla stock closed down -5.93 or -2.86 percent to $201.35 in Wednesdayâ s regular trading session.

Palo Alto, California based Tesla Motors Inc. is a world class electric auto manufacturer that produces two fully electric powered automobiles at the companyâ s single plant in Freemont, California.
The Tesla Roadster and the Tesla Model S, the first fully electric sports car and luxury sedan ever produced. Tesla Motors also markets electrical components to other automakers such as Daimler and Toyota (TM). These include electric powertrain components and lithium-ion battery packs used in electric and hybrid models. Teslaâ s first quarter earnings were significantly lower than the previous quarter, the company reported it had earned $0.12 per share on $713 million in revenue. The analyst consensus was for the company to earn $0.10 per share versus $699 million in sales. In a letter to shareholders, the company said it had increased weekly production to 700 vehicles, up 15 percent from the rate of production at the end of its last quarter in 2013. The company expects to increase production to 1,000 vehicles per week by the end of 2014. Tesla produced 7,535 S Model vehicles in the first quarter and expects to deliver 7,500 of the units in the second quarter. The company also began its leasing program and expects to lease 200 vehicles in the second quarter. The company continues in their effort to deliver 35,000 Model S this year, Tesla plans to produce between 8,500 and 9,000 cars in the second quarter, 13 percent to 19 percent higher than in the first quarter. Another development for the company is the beginning of production of powertrains for the Mercedes B Class vehicle. Plans are still on track for the companyâ s planned Gigafactory with 2017 set as the target for the beginning of production. A location has not yet been finalized, but Tesla is already in talks with Panasonic. The company is expecting battery pack production to reach 50 GWh and cell production capacity to 35 GWh. Tesla will also be launching its right hand drive Model S in the UK in June, with Japan and Hong Kong to follow later in the summer. Its more affordable Model X is slated to begin production in the spring of 2015. Despite the increased business, Tesla is still not in the black. With its increasing expenses, including operating expenses, which are projected to grow by +30 percent for R&D and another +15 percent for SG&A. In addition, the company is planning on investing $650-850 million for increased production capacity. The companyâ s market cap is almost $25 billion, with Tesla stock at these levels. Nevertheless, the companyâ s potential continues to surprise investors. A more substantial selloff could present an opportunity. Other News About Tesla Tesla Motors, Inc. and Boutique Branding in China Company makes branding effort in China. Mercedes Partners Tesla Motors Inc For New $41,450 Electric Car Mercedes has a stake in Tesla and will team up for its new electric auto. Other Stocks in the News Amazon's Wholesale Slaughter: Jeff Bezos' $8 Trillion B2B Bet AmazonSupply targeting the B2B distribution market. Clean Energy Fuels Corp. Earnings: Will the Stock Bounce Back? Company set to announce earnings .

Published on May 8, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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