Electric-car maker Tesla surprises with second-quarter profit

DETROIT Wed Aug 7, 2013 7:22pm EDT

1 of 2. The logo for Tesla Motors is shown at the company headquarters in San Carlos, California in this June 30, 2008 file photo.

Credit: Reuters/Robert Galbraith/Files

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DETROIT (Reuters) - Electric-car maker Tesla Motors Inc (TSLA.O) surprised Wall Street with better-than-expected earnings on Wednesday, and investors pushed the stock up as much as 14 percent in after-hours trade.

As Tesla has ramped up production of its Model S sedan - the best-selling U.S. electric car despite a starting price of more than $70,000 - the company's stock price has more than quadrupled in the past year.

Tesla said on Wednesday it had sold 10,500 Model S sedans in the first six months and expects to reach an annualized rate of 40,000 by late 2014, as it expands sales to Europe and Asia.

After the market closed, the company reported a second-quarter non-GAAP profit of 20 cents a share versus an expected non-GAAP loss of 17 cents. In after-hours trade, the stock hit a high of $153 a share, up from its Wednesday close at $134.

Tesla raised more than $1 billion in equity and debt in May and paid off a $440-million government loan balance. It closed the quarter with $746 million in cash and said it expects its gross margin to climb to 25 percent by year-end.

Revenues in the quarter were $405 million, down from $562 million in the first quarter, reflecting an accounting requirement that defers some revenue on vehicles financed through Tesla and its financial partners. On a non-GAAP (Generally Accepted Accounting Principles) basis, revenues rose to $551 million.

The company said it lost $30.5 million, compared with a first-quarter profit of $11.1 million. On a non-GAAP basis, however, it reported net income of $26 million, excluding lease accounting, non-cash items and one-time charges associated with its early payoff of a U.S. Department of Energy loan.

"The entire sell side was looking for a loss," said Theodore O'Neill, managing director of Litchfield Hills Research, in a client briefing late Wednesday.

Morgan Stanley, in a briefing note to clients late Wednesday, said Tesla's second-quarter results surpassed "already high" expectations "that continue to rise nearly as fast as the share price."

The company plans to begin selling a companion crossover model, the Model X, late next year, with volume production to begin in 2015.

Tesla founder and chief executive Elon Musk, in an earnings call with analysts, said a third model, a compact electric sedan known internally as Gen 3 that is due in 2016, will have a 200-mile range per charge.

Musk confirmed the new sedan, which he described as "our high-volume affordable car," will be priced from around $35,000 before any federal or state tax credits are applied.

(Reporting by Paul Lienert in Detroit; Editing by Ken Wills)

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Comments (4)
Uh oh, don’t let the righties here this, as far as they are concerned electric vehcilces are useless.

Good Job Tesla! Be one of the leaders of the future.

Aug 07, 2013 6:02pm EDT  --  Report as abuse
ptiffany wrote:
It’s interesting that all of the pundits we’ve heard on the subject predicted that Elon Musk (also behind commercial space travel) would fail. I wonder who among the Detroiters influenced these opinions who always claimed they were being forced into failing projects to manufacture electric vehicles. Remember the EV that the users loved, but GM took back and destroyed?

Aug 07, 2013 6:26pm EDT  --  Report as abuse
gregbrew56 wrote:
I drove three different GM EV-1 electric vehicles from 1997-2001. They were lease only. A consortium of drivers (including Jay Leno) offered $1M+ to allow us to buy the vehicles at lease end, no strings attached. The cars were that good. GM turned us down flat, confiscated vehicles that were still on the road, and crushed them in the Arizona desert. They claimed drivers didn’t want them, when every single vehicle produced was leased and being driven.

EVs are a game changer that challenges the status quo and the current automobile/fuel business model would be severely disrupted, as there’s nearly zero maintenance and you can generate your own fuel on the roof of your house. I’ve got 5kW of self-paid for panels on my roof right now, powering a Leaf and a Volt.

See “Who Killed the Electric Car” for more details.

Large automakers are for the most part currently slow-rolling EV models, and Tesla is going to eat their lunch.

Go Elon! Go Tesla!

Aug 07, 2013 7:53pm EDT  --  Report as abuse
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