Tesla Motors (TSLA 1.70%) stock fell about 6% in after-market hours when the company reported second-quarter results and lowered its full-year guidance for deliveries. Here are some quick takeaways from the report.
Tesla beat analyst estimates for both revenue and EPS when it reported second-quarter results. The company reported non-GAAP revenue of $1.2 billion and a non-GAAP loss per share of $0.48. This performance compares with analyst estimates for $1.17 billion and a $0.60 loss.
Tesla's second-quarter Model S deliveries, which were announced ahead of the report, were 11,532, up 52% from the year-ago quarter. These deliveries were well above Tesla's guidance range of 10,000 to 11,000 cars for the quarter.
Notably, Tesla said it only drew $50 million from its recently opened credit line of $750 million. And the company ensured it was comfortable with its cash flow, even as year-over-year spending on growth initiatives continues to grow rapidly.
Model X and Model 3
Tesla said in its second-quarter letter to shareholders that its upcoming fully electric SUV, Model X, "remains on track for start of deliveries in late Q3." Model X deliveries in Q3 will be "a small number," management said.
And as the Model X launch approaches, Tesla said it has been "building more validation vehicles, executing final engineering and testing work, enabling our new manufacturing equipment and finalizing arrangements with our suppliers."
The company also remains on track for its Model 3 launch, planning to reveal the Model 3 design in Q1 next year and begin deliveries in late 2017.
Going into Q3, Tesla is guiding for about the same deliveries as in Q2 -- so approximately 11,500, representing 48% year-over-year growth in Model S deliveries. This growth is about in line with year-over-year growth in vehicle deliveries of just over 50% in Q1 and Q2.
For the full year, Tesla is reducing its guidance for 55,000 combined deliveries for Model S and Model X to a range of 50,000 to 55,000 vehicles. Essentially, Tesla seems to be trying to leave more room for error in the Model X production ramp.
Management explained the reduced forecast in the earnings release:
While our equipment installation and final testing of Model X is going well, there are many dependencies that could influence our Q4 production and deliveries. We are still testing the ability of many suppliers to deliver high quality production parts in quantities sufficient to meet our planned production ramp. Since production ramps rapidly late in Q4, a one-week push out of this ramp due to an issue at even a single supplier could reduce Model X production by approximately 800 units for the quarter. Furthermore, since Model S and Model X are produced on the same general assembly line, Model X production challenges could slow Model S production. Simply put, in a choice between a great product or hitting quarterly numbers, we will take the former. To build long- term value, our first priority always has been, and still is, to deliver great cars.
While it's definitely concerning that Tesla's initial full-year guidance has turned out to be more unrealistic than the company thought, Tesla's growth remains stunning. And its full-year guidance is still incredibly robust, implying 65% year-over-year growth in vehicle sales. Beyond 2015, with Model S sales still on the rise and the Model X launch just around the corner, Tesla looks poised to continue to grow quarterly sales by 50%-plus.