What's happening: Electric-car maker Tesla Motors' (NASDAQ:TSLA) stock fell about 10% this morning after the company reported second-quarter results after market close on Wednesday. While both Tesla's revenue and EPS were actually better than expected, the company's decision to lower its full-year guidance sparked a sell-off.
Why it's happening: Going into Tesla's second-quarter report, it was clear that guidance would be one of the most critical items to watch. Given the company's ambitious goal to sell 55,000 vehicles this year, up more than 70% from sales last year, investors have been watching to see whether or not Tesla would choose to maintain this robust outlook.
Until now, Tesla has remained on track with its plan to hit full-year guidance. For Q1 and Q2, Tesla had already delivered about 21,600 vehicles, or about 39% of its forecast for 55,000. This was in line with Tesla's prediction to deliver about 40% of its forecast 2015 units during the first half of the year.
But selling the remaining 33,400 vehicles is looking like it may be more difficult than planned. The company lowered its guidance from 55,000 to a range of 50,000-55,000, citing less confidence in the production ramp for its Model X SUV. Tesla plans to begin first deliveries of the SUV in late Q3.
Achieving Tesla's revised guidance will still require substantial growth in vehicle sales. Unit deliveries will need to soar about 90% in the second half of 2015 compared to the second half of 2014 for Tesla to hit its new guidance range.