Earnings news for Tesla Inc. (NASDAQ:TSLA) was a bit somber as the electric car maker announced lower than expected losses. The electric car company reported a loss of $702 million, or $4.10 a share, citing lagging sales and cost control issues. “I would prefer we were private,” Mr. Musk said replying to a question by an analyst, “Unfortunately that ship had sailed.” The reply was made in response to a question from Mordan Stanly analyst Adam during the earnings call and references his run-in with the SEC with charges of attempting to manipulate the stock price of Tesla.
The earning news will have an obvious reaction on the already volatile share price where there exists heavy short interest. Famed hedge fund manager Whitney Tilson has been particularly adamant that the car market is on its last leg.
Philip Carret was an investor and founder of Pioneer Fund, one of the first mutual funds in the United States. Carret ran the mutual fund for 55 years, during which time an investment of $10,000 became $8 million. That suggests he achieved a compound annual return of nearly 13% for his investors. Q1 2021 hedge Read More
Unpackaging the loss tells the story: the losses were exacerbated by several non-reoccurring charges that fell on the car market at the beginning of the quarter, $188 million and a reconstruction charge of $67 million respectively. Without these two charges, the losses for the quarter would have been $494 million.
Analysts were expecting a loss of only $5.4 billion, or $1.15 a share, for the quarter. CEO Elon Musk reiterated claims about lower than expected sales for the quarter which undoubtedly negatively impacted earnings. Tesla reported that car delivers totaled 63,000 for the quarter, a figure that is one third lower than the previous quarter. Mr. Musk believes that the introductory Telsa car called the Model 3 will allow the car manufacturer to meet its annual targets.
A change from the prior two consequence quarters which showed the automaker finally showing signs of profitability after seven consecutive quarters of losses. Last year the fourth quarter had the automaker posting a $139 million profit, following the third quarter’s earnings of $311.5 million, which was the first time the automaker was profitable.