(Updates share price, rewrites headline)
DETROIT May 7 Tesla Motors Inc, led by
billionaire Elon Musk, on Wednesday offered an outlook for the
second quarter that disappointed some investors, sending shares
down 7 percent in after-hours trading.
Tesla posted a higher-than-expected first-quarter operating
profit and said its operating automotive gross margins in the
current quarter would increase slightly. S&P Capital IQ analyst
Efraim Levy called the outlook a disappointment, saying
investors had hoped for something better.
The Palo Alto, California-based company reported a
first-quarter net loss of almost $50 million, compared with last
year's first-ever quarterly profit.
Tesla said it would spend up to $850 million this year to
boost production capacity of its Model S luxury electric sedan,
develop the Model X crossover vehicle and start construction of
a new lithium-ion battery plant, dubbed the "gigafactory." It
said that would leave the company with a negative free cash flow
Like other so-called momentum stocks, Tesla's shares have
fallen recently and at the close of the market on Wednesday were
down more than 20 percent from an all-time of $265 in
mid-February. In after-hours activity, Tesla shares traded at
$187.07, after closing at $201.35.
The company said the project to begin production of
lithium-ion batteries at the plant is on course for 2017.
"We have not yet finalized the ultimate location for the
gigafactory and we are going to start work on at least two
locations in parallel in order to minimize risk of delays
arising after groundbreaking," Musk said in a letter to
shareholders posted online.
He also said discussions with battery supplier Panasonic
Corp and other potential partners for the plant
"continue to go well and we are pleased with the high interest
level in the project." Analysts have said Tesla needs to get the
plans for the plant finalized soon if it wants to meet its 2017
Excluding one-time items, Tesla earned $17 million, or 12
cents a share, in the quarter, two cents better than what
analysts polled by Thomson Reuters I/B/E/S had expected. The
results included a currency gain of $6.7 million.
On a net basis, Tesla lost $49.8 million, or 40 cents a
share, compared with a profit last year of $11.25 million, or 10
cents a share. Net revenue rose 10 percent from last year to
almost $621 million, while operating revenue was up 27 percent
at $713 million.
Tesla said it delivered 6,457 Model S cars in the first
quarter, slightly above the 6,400 it had forecast in February.
It also reiterated its full-year delivery target of more than
35,000 cars, including its forecast of about 7,500 cars in the
Tesla also said battery cell supply will still constrain
company vehicle production in the second quarter but that
situation should improve in the third quarter.
(Reporting by Ben Klayman in Detroit; Editing by Steve Orlofsky
and James Dalgleish)