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."

Despite the big drop, Tesla has done well for investors. It was one of the best stocks to own in 2013. If you're looking for one of the best stocks to own in 2014, you can click here now

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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