Tesla Motors Inc (TSLA) Posts Huge Earnings Miss But Shares Rise

Tesla Motors Inc (NASDAQ:TSLA) released its second quarter earnings report after closing bell, posting adjusted losses of $1.06 per share on $1.6 billion in revenue. Analysts had been expecting non-GAAP losses of 59 cents per share on $1.6 billion in sales. In last year’s second quarter, the automaker reported losses of 48 cents per share on $1.2 billion in revenue.

Tesla’s losses widen

Tesla Motors Inc (NASDAQ:TSLA)’s GAAP losses were $2.09 per share, while GAAP revenue was $1.3 billion. Total second quarter GAAP gross margin was 21.6%, while non-GAAP gross margin was 20.8%. Automotive revenue was $1.2 billion in a GAAP basis and $1.5 billion on a non-GAAP basis. The GAAP automotive gross margin was 23.1%, while on a non-GAAP basis, which excludes zero emission credits, it was 21.9%, representing a 200 basis point improvement from the first quarter. Average selling prices for the Model S rose 3% quarter over quarter on the back of higher option take rates and a price increase for the Model S refresh.

As already reported, Tesla missed its guide for deliveries, but management said nearly half of the production during the quarter was during the last four weeks. The automaker ended the second quarter producing 2,000 vehicles per week and said both production and demand are on track to support 50,000 deliveries in the second half of the year. It aims to end the third quarter producing 2,200 vehicles per week and increase to 2,400 vehicles per week in the fourth quarter.

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TSLA updates Gigafactory plan

Tesla Motors Inc (NASDAQ:TSLA)’s capital expenditures amounted to $295 million in the second quarter aimed at increasing production capacity, building the Gigafactory, and expanding infrastructure for customer support. The automaker said construction on the facility is still on target to support volume production of the Model 3 in late 2017. It also said they accelerated construction on it to reach a production rate of 35 gigawatts per year in 2018, thus enabling them to meet the needs of their accelerated production plan for the Model 3.

Tesla also said it completed the design phase for the Model 3 and is accelerating store openings. It plans to add a new retail store every four days on average through the rest of the third quarter and during the fourth quarter.

Tesla updates guidance

The automaker said it is still on track to deliver about 50,000 Model S and Model X vehicles during the second half of the year. It expects the GAAP and non-GAAP automotive gross margins to rise by two to three percentage points through the third and fourth quarters.

Tesla Motors Inc (NASDAQ:TSLA) shares climbed by as much as 1.35% to $228.83 in after-hours trades.