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Excluding some costs, Tesla earned 11 cents a share in the quarter, the Palo Alto, California-based company said yesterday in a statement on its website. That compares with 4 cents, the average estimate compiled by Bloomberg.
Unit sales for the youngest publicly held U.S. carmaker rose to a best-ever 7,579, matching the average of nine analysts’ predictions. Chief Executive Officer Elon Musk warned in May that tight supplies of lithium-ion batteries would hold quarterly deliveries of Tesla’s flagship Model S, priced from $71,000 in the U.S., to 7,500 units. Tesla said it will deliver more than 35,000 cars this year and reach a run rate of 100,000 a year by the end of 2015.
Next year’s projection is the “biggest thing” in the results, said Ben Kallo, an equity analyst with Robert W. Baird & Co. who rates Tesla the equivalent of a buy. “It’s an exciting next year at 100,000. This should override everything.”
Tesla fell 2.5 percent to $223.30 yesterday in New York, paring the gain for the year to 48 percent. The stock was little changed in extended trading. In two of the last three quarters, Tesla shares have fallen after the company exceeded the average of analysts’ estimates.
A Tesla showroom in Beijing.
‘Volatile Stock’
“It is such a volatile stock, so the reaction can be hard to predict,” said Efraim Levy,
an analyst for S&P Capital IQ who rates Tesla a hold. He predicted
the company would report a profit of 7 cents per share, adjusted from
generally accepted accounting principles, and a gross margin of 25.7
percent in the quarter, on a non-GAAP basis. Tesla said its non-GAAP automotive margin was 26.8 percent. On a GAAP basis, it was 26.9 percent, the company said.
“With Tesla you want to see sequential growth in deliveries and a steady increase in capacity,” Levy said. “You want to see progress in China as it’s one of their venues of growth.”
The carmaker’s net loss widened to $61.9 million, or 5 cents a share, exceeding an estimate of $41.2 million. Revenue totaled $769.3 million for the quarter, excluding $88.2 million in deferred revenue for leased vehicles, the company said. Adjusted for the lease accounting, revenue exceeded analysts’ estimates by 5.5 percent.
A year earlier, the company earned an adjusted 20 cents a share.
More Investment
The company now plans to invest $750 million to $950 million this year in capital spending and research and development, an increase of $100 million from the previous forecast range.Deliveries in the third quarter should rise to 7,800 units, Tesla said yesterday. That suggests the company must get at least 13,000 cars to customers in the year’s final quarter to meet its 35,000-unit delivery goal for 2014.
Preparation at a site near Reno, Nevada, for the proposed plant that Tesla calls a Gigafactory, intended to be the world’s largest producer of lithium-ion cells, began in June, the company said.
“We’ve essentially completed the creating of the construction pad for the Gigafactory in Nevada,” Musk said yesterday in a conference call. “We are going to be doing something similar in one or two other states, something I previously said we were going to do.”
The company is reviewing additional sites in California, Arizona, New Mexico and Texas and will decide within a few months on the other sites, he said.
Panasonic’s Investment
Earlier yesterday, Panasonic Corp. said it would invest an undisclosed amount in the Nevada plant that Musk wants to open by 2017 and that eventually will employ as many as 6,500 people.Musk, 43, reiterated in a conference call yesterday that the plant will require as much as $5 billion to build.
“Of that number, we see Tesla probably providing 40 to 50 percent of the total; Panasonic probably about 30 to 40 percent; the state maybe 10 percent; and other industrial partners maybe 10 to 15 percent, depending on how vertical we go with the factory,” Musk said on the call.
That suggests Panasonic’s investment would rise to as much as $2 billion.
The factory is to achieve cost reduction through large-scale assembly and vertical integration of all aspects of production, Musk said.
“Processed ore from mines will enter by railcar on one side and finished battery packs will exit on the other,” Musk and Chief Financial Officer Deepak Ahuja said in the letter to shareholders.
Mass-Market Car
Tesla’s goal is for the plant to produce batteries that are 30 percent cheaper than those it now uses. The new batteries will power a more mass-market electric car, the Model 3, that’s due by 2017.The Gigafactory would also make stationary batteries to let homes and businesses store power from solar panels.
When it comes to Tesla, “forget about the metrics we use on normal companies,” said Erik Gordon, a professor at the University of Michigan’s Stephen M. Ross School of Business.
“Tesla is all about dreams that occasionally are tempered with fears. You buy the stock to participate in the dream of being part of a visionary, revolutionary company near its beginning,” he said. “Once in a while, shivers of fear zoom through the believers.”
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