Tesla (TSLA) Shares Hammered after Second Quarter Results, Lower Delivery Forecast

Shares of Tesla Motors Inc. (TSLA) were trading down -15.08 or -5.58 percent to $255.05 per share in Thursday’s premarket after the company reported earnings for the company's 2015 second quarter yesterday after the market close. Tesla also lowered its forecast for deliveries including its two new models set to begin selling in late September. Tesla Motors stock closed at $270.13 per share, up +3.85 or +1.45 percent in Wednesday's regular trading session.

Palo Alto, California based Tesla Motors Inc. is a world class electric auto manufacturer that produces two fully powered electric automobiles at the company'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. These include electric powertrain components and lithium-ion battery packs used in electric and hybrid models. The company's new Model X and Model X SUV are scheduled to begin deliveries by the end of September.

Tesla reported its net loss had tripled in the quarter to $1.45 per share versus -$0.50 in the same period one year ago. On an adjusted basis, the company lost -$61 million or -$0.48 per share on revenue of $1.2 billion. Analysts were expecting the company to report a loss of -$0.59 per share on revenue of $1.17 billion.

The loss was due in large part to the company's investment in retooling and expanding capacity at its plant for Tesla's new SUV. The company also reported spending on the construction of its new battery plant in Nevada and the opening of five new stores in China, as well as expanding its network of Supercharger stations, which now total 487 worldwide.

Tesla reported it had sold a record 11,532 Model S cars in the quarter, bringing this year's total to 21,577 cars delivered so far this year. The company had previously forecast it would deliver 55,000 cars by the end of the year, but revised its estimate to 50,000 to 55,000 in its quarterly earnings report. Tesla missed its goal of 33,000 deliveries last year by 1,300 cars.

In the company's Form 8-K filing with the SEC, the company noted that, "In Q3, we expect to produce just over 12,000 vehicles, representing a more than 60% increase from a year ago. This includes a small number of Model X deliveries". The filing also stated that, "We are still testing the ability of many suppliers to deliver high quality production parts in quantities sufficient to meet our planned production ramp."

"Furthermore, since Model S and Model X are produced on the same general assembly line, Model X production challenges could slow Model S production. Simply put, in a choice between a great product or hitting quarterly numbers, we will take the former".

Despite beating analyst expectations for second quarter earnings and revenue, Tesla disappointed investors by lowering its estimate of delivering 55,000 cars by year's end. So far, deliveries for the first half of the year have fallen short by about 5,400 cars. Tesla stock was up briefly in aftermarket trading yesterday, but began selling off during the analyst conference after the earnings release.

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Published on Aug 6, 2015
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 2016. Content published with author's permission.

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