Tesla Motors Inc Disappoints Investors With Weak 2Q Delivery Guidance

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Tesla Motors Inc (NASDAQ:TSLA)’s  guidance for the second quarter is centered on the number of deliveries, as for the first quarter, the number came in lower than analyst estimates. Guidance for the second quarter was also lower than expectations. Tesla could not sell as many Model S sedans as was expected, even when Norway hit the record number of sales with 1,500 units.

Barclays analyst Brian A. Johnson, in a report dated May 7, 2014, said he believes investors will not be optimistic after the guidance for the second quarter, which will likely be “marginally profitable” and have high R&D costs.

Q2 delivery guidance way below consensus

The number of Model S sedans delivered was 6,457, compared to guidance of 6,400, Barclays’ estimate of 6,616, and consensus estimates of 6,609. Tesla Motors Inc (NASDAQ:TSLA) posted a production number of 7,535 units, compared to guidance for 7,400 units.

In the second quarter of 2014, Tesla Motors Inc (NASDAQ:TSLA) is aiming to deliver 7,500 units, whereas consensus estimate suggested 8,452 units. For the full year of 2014, Barclays is expecting delivery of 35,000 units, the same as the guidance given by Tesla. Additionally, Tesla is expecting to double its sales in Europe and Asia, making sales in those two regions combined be more than North America.

In the first quarter, Tesla Motors Inc (NASDAQ:TSLA) posted non-GAAP revenue of $713 million, compared to the consensus estimate of $699 million and Barclays’ estimate of $711 million.  The non-GAAP margin was posted at 25.4%, compared to Barclays’ estimate of 25.2%, and it was marginally above the fourth quarter gross margin. In the same quarter, operational expenses came in at $165 million, compared to guidance of an increase of 15% from the fourth quarter of 2013, which would be $167 million, and Barclays’ estimate of $614 million.

Barclays has an Equal-Weight rating on Tesla Motors Inc (NASDAQ:TSLA) with a price target of $220.

Tesla investors disappointed

Tesla Motors Inc (NASDAQ:TSLA) investors are not satisfied with the earnings per share figure. Lately investors are finding it risky to invest in Tesla as lower returns from momentum companies in the first months of 2014 pushed the stock down from over $250 to below $200. With companies like BMW making efforts in the electric car industry, investors are skeptical about whether Tesla will be successful.

On Wednesday Tesla Motors Inc (NASDAQ:TSLA) shares were down 2.86% to close at $201.35. In pre-market trading, shares were down 5.80% at $189.68.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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