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Tesla Motors Inc. (Nasdaq: TSLA) stock is down more than 6% in afterhours trading today (Wednesday) despite the fact that the company beat earnings projections in the first quarter.
Tesla announced adjusted earnings per share (EPS) of $0.12 per share, which was above consensus estimates of $0.10 per share.
Revenue for the quarter was $713 million, which also beat consensus estimates of $699 million.
But as is always the case with Tesla, today's earnings report and TSLA stock's movement rely on much more than just revenue and EPS…
Looking Deeper at Tesla's (Nasdaq: TSLA) Earnings Report
First, Tesla reported that it produced 7,535 Model S sedans in the first quarter, which was a quarterly record for the company. Production has increased by 15%. At the end of 2013, Tesla was producing 600 vehicles a week, and that is now up to 700. The company had previously stated that it wants to produce 1,000 vehicles per week by the end of 2014.
The company said it expects to produce 7,500 vehicles in the second quarter.
The company delivered 6,457 vehicles globally during that quarter, which beat consensus estimates for the quarter. However, that total was down from the 6,892 vehicles it delivered in Q4 of 2013. In the fourth quarter, TSLA had sales growth of 25% for its sedans, so a Q1 slip is moving the stock.
Despite the fact that it sold fewer vehicles than in Q4, the company maintains that it is still on track to reach its goal of delivering 35,000 vehicles globally in 2014.
The company also provided an update on Chinese expansion. Tesla made its first move into China last month when Chief Executive Officer Elon Musk hand-delivered Model S sedans at a public event in Beijing. At the time the company detailed its plan to build a supercharger network in the country and start manufacturing vehicles in China within the next few years.
"We plan to expand in China as fast as possible because we believe the country could be one of our largest markets within a few years," the company said. "We are also encouraged by how fast we have been able to develop our infrastructure in China when the proper support is in place."
The company has built one additional supercharger station in China to add to the three it previously operated.
To further expand global sales, the company stated today that it will be increasing the number of stores and service centers it operates globally by 75% this year. Company officials also announced that they plan to spend as much as $850 million in capital expenditures this year to increase production capacity, build more stores, and begin construction of the "Gigafactory."
Unfortunately for investors, the company provided no update on the Tesla Gigafactory. The company had previously stated that it would move forward with two locations to ensure the factory was built by 2017. Today, the company stated that it has not decided on locations and reiterated that it's still on track for 2017 completion.
"The progress Tesla is making on the Gigafactory is important to investors because that factory could be a game-changer for the auto industry and could change industrial storage capacity for power," Money Morning's Defense & Tech Specialist Michael A. Robinson said.
"I think it's just an absolutely brilliant move to have the groundbreaking at two locations," Robinson said. "If the environmental activists in one state try to slow down the factory, the company can just go elsewhere. It's another sign of a bold strategic thinker."
While TSLA stock is down in after-hours trading, here's what the long-term outlook is for TSLA stock…
Partner for gigafactory selected and Cali back in mix for location.
"During a conference call with analysts, Musk said Tesla has signed a "letter of intent" with Panasonic to jointly build a giant "gigafactory" for batteries for electric cars. Musk also said that California is back in the running to host the gigafactory, joining four other states. But Musk added that the speed with which states can issue permits for the massive facility is key. "The main thing with California is time to completion," he said."
During a conference call with analysts, Musk said Tesla has signed a "letter of intent" with Panasonic to jointly build a giant "gigafactory" for batteries for electric cars. Musk also said that California is back in the running to host the gigafactory, joining four other states. But Musk added that the speed with which states can issue permits for the massive facility is key. "The main thing with California is time to completion," he said.
This guy's a bit of an idiot, it seems. Amazing to watch someone suggest that introducing new lines of automobiles, built on revolutionary technology for which there is no precedent, into a foreign market on the other side of the world over the course of 3 – 4 years is "not anytime soon", as if to say that this is being done slowly, and if things were done right this feat would be accomplished in a matter of weeks or months. Does anyone get how ****ing remarkable it is that this is happening at all, and that they are in… Read more »