Strategy

Tesla Reports Lower-Than-Expected Q2 Loss

Revenue increases 56% to $1.2 billion but Tesla's reduced outlook for deliveries this year disappoints Wall Streeet.
Matthew HellerAugust 5, 2015
Tesla Reports Lower-Than-Expected Q2 Loss

Tesla Motors on Wednesday released better-than-expected earnings for the second quarter but its shares fell as the auto maker cut its forecast for 2015 deliveries.

Tesla’s second-quarter adjusted loss of $61 million, or 48 cents a share, on sales of $1.2 billion beat analysts’ estimates of an adjusted loss of 60 cents a share on sales of $1.19 billion. During last year’s second quarter, Tesla made $0.11 per share but this year’s revenue was up more than 50% from $769.35 million.

“Simply put, in a choice between a great product or hitting quarterly numbers, we will take the former,” Tesla said in a letter to shareholders. “To build long-term value, our first priority always has been, and still is, to deliver great cars.”

CFO Insights on Inflation, Workforce Challenges, and Future Plans 

CFO Insights on Inflation, Workforce Challenges, and Future Plans 

Download our 2022 survey report for a high-level view of finance team projections and strategies, directly from our CFO.com executive readers.

But Tesla disappointed Wall Street by estimating that it will sell between 50,000 and 55,000 cars this year, backing off its earlier estimate of 55,000. The stock fell more than 7% in after-hours trading after closing with a 1.5% gain at $270.13.

The company explained that while equipment installation and final testing of its new Model X “is going well, there are many dependencies that could influence our Q4 production and deliveries.” Among other things, since Model S and Model X cars are produced on the same general assembly line, Model X “production challenges could slow Model S production.”

Tesla sold 21,537 vehicles through the first half of 2015. The company said it still expects Model X deliveries to begin late in the third quarter.

According to Business Insider, Model X sales aren’t expected to make a major contribution to Tesla’s 2015 goal — probably less than 5,000 vehicles, assuming the launch goes off without any hitches. “That means delivering over 25,000 Model S sedans by the end of the year is critical,” Business Insider said.

4 Powerful Communication Strategies for Your Next Board Meeting