Tesla Inc (TSLA) 3Q17 Earnings Results Sink The Stock

Tesla Inc (NASDAQ:TSLA) 3Q17 earnings were released after closing bell tonight, and the company posted losses of $2.92 per share on $2.98 billion in sales. analysts had been expecting adjusted losses of $2.29 per share on $2.95 billion in sales. In the year-ago quarter, the company reported adjusted earnings of 71 cents per share on $2.3 billion in revenue.

Tesla 3q17 earnings
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Tesla 3Q17 earnings

Tesla’s automotive revenue rose to $2.36 billion from $2.15 billion last year. The GAAP automotive gross margin fell to 18.3% from 29.4% last year. The non-GAAP automotive gross margin excluding credit sales was 18.7%. Energy generation and storage revenue rose to $317.5 million from $23.3 million a year ago. The energy generation and storage gross margin amounted to 25.3%.

The company said net orders for the Model S and Model X reached a record high during the quarter in what looks to be an attempt to calm fears that the Model 3 will cannibalize sales of its more expensive vehicles. The automaker said it delivered the 250,000th Tesla vehicle during the third quarter, making the number of Teslas on the road approximately 100 times bigger than it was before the Model S launch.

The automaker had a cash balance of $3.5 billion entering the fourth quarter.

Tesla deals with production bottlenecks

Tesla already said in early October that it delivered 26,150 vehicles during the third quarter, including just 220 Model 3 cars. It was yet another miss versus consensus, which had been at 25,860 total vehicle deliveries including 1,260 Model 3 cars. The company also came up short of its own guidance again, as it had planned to build 1,500 Model 3 cars about two months ago. Tesla updated these numbers tonight to 25,915 Model S and Model X vehicles and 222 Model 3 cars, totaling 26,137 vehicle deliveries.

Tesla cited production bottlenecks for the shortfall, and since then there have been multiple claims flowing from the automaker’s production facility, including reports of mass firings and even allegations that the company was building Model 3 cars by hand. Tesla said in its shareholder letter that the main problem has been in Gigafactory 1’s battery module assembly line. The automaker said it is difficult to predict how long it will take for all the bottlenecks to be cleared up, but it now expects to be producing 5,000 Model 3 cars be late in the first quarter of 2018.

Following the Tesla 3Q17 earnings release, the company’s stock tumbled by as much as 3.65% to $309.36 in after-hours trades.