Home Technology Tesla Motors Inc Stock Falls As Earnings Fail To Convince Investors

Tesla Motors Inc Stock Falls As Earnings Fail To Convince Investors

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The king of momentum stocks released its earnings numbers for the three months through March this afternoon after the market closed on Wall Street. Tesla Motors Inc (NASDAQ:TSLA) showed earnings per share of 12 cents in the earnings report. The quarter, which the company recorded as its first of 2014, saw the company make total sales of $713 million. On Wednesday’s market shares in the company suffered from negativity and fell strongly to close at $201.35.

Analysts were expecting a relatively weak quarter from Tesla Motors Inc (NASDAQ:TSLA), with 6 cents being the consensus earnings per share figure gathered by Businessweek. The 12 analysts surveyed by the company were expecting to see sales of $699.1 million for the quarter. In the same three months of 2013 Elon Musk’s firm earned 12 cents per share on revenue of $562 million.

Tesla investors care about numbers

Given Tesla’s position as a growth stock, the earnings per share figure isn’t all that good of an indicator of the health of Tesla Motors Inc (NASDAQ:TSLA). The company’s quarterly filings have a couple of other figures that the company’s investors prefer to look at on the release of an earnings report.

The first, and most obvious, of these is vehicle sales, particular given the analysts opinions heading into today’s release. In the first quarter of 2013 Tesla Motors Inc (NASDAQ:TSLA) managed to sell 4,900 cars. In the first three months of 2014 the company recorded revenue on the delivery of 6,892 Model S.

The second number that instantly appeals to Tesla Motors Inc (NASDAQ:TSLA) investors is the company’s gross margin. Investors need that number to stabilize as Tesla Motors Inc (NASDAQ:TSLA) grows so that the company can prove its ability to keep manufacturing costs in check. In the first quarter of 2013 that number came in at 17%. In Wednesday’s report the company said that figure sat at 25.4% in the first quarter.

Tesla powers into the future

Despite the top line on today’s earnings report, it is not this quarter’s numbers that matter to the electric car company. Despite the comparisons of analysts last years numbers don’t make all that much difference either. With a multiple like that on Telsa Motors Inc (NASDAQ:TSLA) the only quarterly earnings numbers that matter are ones that haven’t arrived yet. Predicting those is a difficulty that investors and analysts face every day.

Investing in Tesla Motors Inc (NASDAQ:TSLA) may have seemed riskier than usual as of late. The compression of returns from momentum companies seen in the first months of 2014 drove the shares from over $250 to below $200, and the stock has stayed trading around that number ever since. Given the rising competition in the electric car world, investors are more nervous about Tesla than they were in the past.

Companies like BMW are building their base of knowledge in the electric car revolution. They’re designing manufacturing methodology and engineering principles to make a challenge for the mass market. Tesla Motors Inc (NASDAQ:TSLA) is apparently set to market a car in large quantities in 2017. By that year, it’s unlikely the company’s competition will be quite so far behind.

Tesla Motors Inc (NASDAQ:TSLA) management will host an earnings call at 5:30PM EDT in order to discuss this afternoon’s release with investors and analysts.

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