Tesla Motors Inc. Crushes Q1 Estimates, Announces Soft Q2 Guidance; Shares Fall 7%

Tesla Motors beat the Street in the first quarter but followed up with disappointing earnings guidance. Shares fell 7% on the news.

May 7, 2014 at 5:56PM

Tesla Model X
The Tesla Model X is under heavy development right now. Image source: Tesla Motors.

Tesla Motors (NASDAQ:TSLA) just reported results for the first quarter of 2014. The electric-vehicle builder beat analyst targets on both the top and bottom lines but followed up with mixed next-quarter guidance. Responding to the news, shares fell more than 7% in after-hours trading.

In the first quarter, Tesla produced 7,535 Model S vehicles and shipped 6,457 units to its customers. 1,181 of these deliveries were sold with a resale value guarantee.

These shipments generated $713 million in non-GAAP revenue, which is a revenue metric that adds back the long-term value of financing contracts signed with an RVG. Further down the income statement, Tesla reported $0.12 of adjusted earnings per share.

Analysts were looking for earnings of $0.10 per share on $699 million in sales. Tesla beat both targets by a fair margin.

Looking ahead, Tesla sketched out second-quarter revenue of roughly $827 million, but the quarter will only be "marginally profitable" in non-GAAP terms. Analysts were looking for slightly lower next-quarter sales but also projected robust year-over-year earnings growth.

Tesla explained that battery cell supplies remain a bottleneck in the manufacturing process, and that production will exceed shipments in the second quarter because of long delivery times for build-to-order cars in Europe and Asia.

"We are expanding our factory capacity to support increased Model S production later this year and the introduction of Model X next year," said Tesla CEO Elon Musk and CFO Deepak Ahuja in a prepared statement. "Extensive development work on Model X is under way, and we expect to have production design prototypes ready in Q4."

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Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days.

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Jun 12, 2015 at 5:01PM

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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