Tesla Shares Dive on Earnings, Revenue Miss

The electric car maker's gross margins also fell to 19.8% in the quarter.
By Jacob Sonenshine ,

Tesla (TSLA) - Get Report  fell sharply in after-hours trading Wednesday after the electric-vehicle maker reported second-quarter earnings and sales after the bell that badly missed consensus estimates.  

TSLA was down some 10.1% at $238.06 shortly at 5:40 p.m. ET in post-market trading after having risen 1.8% during regular hours. The stock tumbled after Tesla reported a $1.12-per-share adjusted loss vs. estimates for 40 cents per share in red ink. Revenues of $6.35 billion likewise fell short of estimates for $6.41 billion, while Tesla's closely watched automotive gross margin dropped to 18.9% from 20.6% in the year-ago quarter.

On the plus side, Tesla reported that it delivered 95,356 vehicles in the quarter. The company had previously guided for deliveries of 90,000 to 100,000 vehicles. "This is an important milestone, as it represents rapid progress in managing global logistics and delivery operations at higher volumes," CEO Elon Musk and Chief Financial Officer Zachary Kirkhorn wrote in a letter accompanying the results.

Tesla also stuck to its previous guidance that it would ship 360,000 to 400,000 vehicles this year. Additionally, the firm said that it generated $614 million in free cash flow in the second quarter and ended the quarter with $5 billion in cash -- the highest level in its history. "This level of liquidity puts us in a comfortable position as we prepare to launch Model 3 production in China and Model Y production in the United States," Musk and Kirkhorn wrote.

The company added that it remains on track to launch local production of the Model 3 in China by year's end. Tesla also said that it expects 2019 capex to be about $1.5 to $2 billion, a reduction from its prior guidance. "We continue to find opportunities to improve capital efficiency and shift cash outflows to future periods," Musk and Kirkhorn wrote.

TheStreet's Anton Wahlman, who's shorting Tesla and is bearish on the stock, was unimpressed. He said Tesla's loss for 2019's first half "now exceeds the total loss for all of 2018, which was $1 billion. The third quarter will be a loss, too -- probably similar to the second quarter -- and I'm guessing the same for the fourth quarter as well. ... This is not a viable business."

(This article has been updated.)

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