Tesla Motors' Big Surprisehttp://www.fool.com/investing/general/2011/08/04/tesla-motors-big-surprise.aspx John Rosevear
August 4, 2011
This wasn't a surprise: Tesla Motors (Nasdaq: TSLA ) lost a bunch of money in the second quarter -- despite a big increase in revenues.
The Silicon Valley electric-car start-up posted a loss of $0.53 a share on revenues of $58.2 million for the quarter. Both of those numbers exceeded consensus Wall Street estimates, but the trends weren't a surprise: Demand is strong (by Tesla standards, at least) for the company's current car, the Roadster, while development of the upcoming Model S sedan is burning big bucks.
The big surprise was elsewhere -- a hint of a huge new deal with mighty Toyota (NYSE: TM ) .
Tesla's big surprise
That RAV4 contract delivered $19 million to Tesla's bottom line during the quarter, and it's expected to bring about $100 million after the deal was expanded in July. But on Wednesday, Musk hinted that much more may be on the way: During a call for analysts, Musk said the company was discussing a deal with Toyota that would be "an order of magnitude" larger than the July contract.
That means billion-with-a-B, the company confirmed after the call. It's not yet a done deal, and we can only guess at the details, but that kind of contract would transform Tesla from a long-shot start-up carmaker to a serious, credible industry supplier.
Maybe even a profitable one. That would be a nice surprise for shareholders.
A smarter route to profitability?