Tesla held down by bigger-than-expected loss. Q2 financial results released
Tesla released its financial results for the second quarter of 2019 and news is both good and bad for the electric car giant and its shareholders. The company announced that it made $6,349 billion in revenue and lost $1.12 per share. These revenue numbers come close to expectations when it comes to revenue but the losses were bigger than anticipated. The market reacted swiftly and some questioned if Tesla’s claim to return to profitability in Q3 is too optimistic.
Better than last Quarter
The last time Tesla published its financial results, things were much worst for the shareholders with $4.5 billion in revenue and a loss of $702 million or $4.10 per share. At the time, the news had analysts doubt the company's ability for a speedy recovery after disappointing delivery numbers, costs and pricing adjustments to its vehicles threw the automaker off its profitability track. Tesla delivered only 63,000 vehicles, which was 25% less than compared to the previous period.
This time around, delivery wise, things have taken a turn for the better. The company shipped 95,200 vehicles, high above most estimates that were expecting the figure to sit around 91,000.
For Q2, Wall Street was expecting revenue of about $6.375 billion for the quarter and a loss of $0.54 per share. Tesla missed the opportunity to improve on any of those estimates. The market did receive the revenue numbers as somewhat reasonable but still reacted immediately to the bigger than expected loss. A reaction that translates into Tesla stock being traded up to 10% down in extended trading.
Since the start of the year, the company has declined by a total of 22%.
But the future doesn’t look so gloomy if Elon Musk’s company manages to fulfill its 2019 plans.
The electric car company has reaffirmed it still expects to sell 360,000 to 400,000 vehicles this year, mostly Model 3s. Tesla also said it plans to improve production at its existing factories including its battery plant outside of Reno, Nevada and a car assembly plant in Fremont, California. They have already delivered 158,200 cars in the first six months of 2019.
The company’s big plans don’t stop there. By the end of the year, Tesla aims to open its Model 3 production facility in China. A move that will allow it to benefit from lower delivery costs and bigger sale numbers in the local market.
The high shipping numbers could lead to an automotive revenue of over $5 billion during the second quarter. A number that, should also see an increase in the next six months. That is if Tesla delivers the more than 200,000 cars needed to reach the low end of its goal for 2019. The company says it has a run-rate of 7,000 Model 3’s per week and aims to up that number to 10,000, by the end of 2019.
Tesla told shareholders that it will return to profitability in Q3. A claim that may find some traction, especially given the fact that the company is now more liquid than ever, following a recent capital infusion of nearly $3 billion. The electric car giant is now sitting on a cash equivalent of about $5 billion – “the highest level in Tesla’s history”, $614 million of that being free cash flow.
Better than last Quarter
The last time Tesla published its financial results, things were much worst for the shareholders with $4.5 billion in revenue and a loss of $702 million or $4.10 per share. At the time, the news had analysts doubt the company's ability for a speedy recovery after disappointing delivery numbers, costs and pricing adjustments to its vehicles threw the automaker off its profitability track. Tesla delivered only 63,000 vehicles, which was 25% less than compared to the previous period.
This time around, delivery wise, things have taken a turn for the better. The company shipped 95,200 vehicles, high above most estimates that were expecting the figure to sit around 91,000.
For Q2, Wall Street was expecting revenue of about $6.375 billion for the quarter and a loss of $0.54 per share. Tesla missed the opportunity to improve on any of those estimates. The market did receive the revenue numbers as somewhat reasonable but still reacted immediately to the bigger than expected loss. A reaction that translates into Tesla stock being traded up to 10% down in extended trading.
Since the start of the year, the company has declined by a total of 22%.
But the future doesn’t look so gloomy if Elon Musk’s company manages to fulfill its 2019 plans.
2019 for Tesla company
The electric car company has reaffirmed it still expects to sell 360,000 to 400,000 vehicles this year, mostly Model 3s. Tesla also said it plans to improve production at its existing factories including its battery plant outside of Reno, Nevada and a car assembly plant in Fremont, California. They have already delivered 158,200 cars in the first six months of 2019.
The company’s big plans don’t stop there. By the end of the year, Tesla aims to open its Model 3 production facility in China. A move that will allow it to benefit from lower delivery costs and bigger sale numbers in the local market.
The high shipping numbers could lead to an automotive revenue of over $5 billion during the second quarter. A number that, should also see an increase in the next six months. That is if Tesla delivers the more than 200,000 cars needed to reach the low end of its goal for 2019. The company says it has a run-rate of 7,000 Model 3’s per week and aims to up that number to 10,000, by the end of 2019.
Tesla told shareholders that it will return to profitability in Q3. A claim that may find some traction, especially given the fact that the company is now more liquid than ever, following a recent capital infusion of nearly $3 billion. The electric car giant is now sitting on a cash equivalent of about $5 billion – “the highest level in Tesla’s history”, $614 million of that being free cash flow.
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