Tesla's (TSLA) Q2 Earnings Miss Estimates, Revenues Beat

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Tesla, Inc.TSLA has incurred adjusted loss of $3.06 per share in second-quarter 2018, wider than the Zacks Consensus Estimate of loss of $2.78. The company reported loss of $1.33 per share in the prior-year quarter.

The reported net loss in the quarter under review was $742.7 million compared with the year-ago net loss of $401.4 million.

Revenues increased to $4 billion from $2.8 billion registered in second-quarter 2017. The figure surpassed the Zacks Consensus Estimate of $3.8 billion.

Tesla produced 53,339 vehicles in second-quarter 2018. Moreover, the company delivered 22,319 Model S and Model X vehicles, and 18,449 Model 3 vehicles, totaling 40,768 deliveries.

Total automotive revenues, including revenues from automotive sales and leasing, increased 47% year over year to $3.36 billion in the reported quarter. The rise was due to Model 3 deliveries.

Energy generation and storage revenues soared from $286.8 million in second-quarter 2017 to $374.4 million in the reported quarter. The rise was mainly due to considerable growth of energy-storage deployments.

Services and other revenues increased 25% year over year, primarily due to higher used-car sales.

Tesla's second-quarter 2018 automotive gross margin was 20.6%, declining 735 basis points (bps) from second-quarter 2017.

Energy generation and storage gross margin declined 1,716 bps on a year-over-year basis to 11.8%.

Tesla, Inc. Price, Consensus and EPS Surprise

Tesla, Inc. Price, Consensus and EPS Surprise | Tesla, Inc. Quote

Financial Position

Tesla had cash and cash equivalents of $2.24 billion as of Jun 30, 2018, compared with $3.37 billion, as of Dec 31, 2017.

Net cash used in operating activities amounted to $129.7 million in second-quarter 2018 compared with net cash used of $200.2 million in second-quarter 2017. Capital expenditure declined to $609.8 million from $959.1 million in the year-ago quarter.

Business Expansion

In second-quarter 2018, Tesla opened eight new stores and service locations. The company also opened 103 new supercharger locations, reaching the global total of 1,308.

Model 3 Update

The company roughly produced 7,000 Model 3, Model S and Model X vehicles in the last week of June. In July, the company repeatedly produced 5,000 Model 3 cars, while producing 2,000 per week as well. After achieving the weekly target of 5,000 Model 3 car production, Tesla is now aiming to produce 6,000 Model 3 vehicles per week by late August.


The company expects to produce 50,000-55,000 Model 3 vehicles in third-quarter 2018, marking an increase of 75-92% from the prior quarter. Model 3 gross margin is likely to increase to around 15% in the third quarter and 20% in the fourth quarter, due to an improving mix and a decline in manufacturing costs.

Tesla expects to deliver around 100,000 units of Model S and Model X in 2018, similar to the prior-quarter guidance.

Zacks Rank & Key Picks

Tesla currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the auto space are PACCAR Inc. PCAR , AB Volvo VLVLY and Fox Factory Holding Corp. FOXF . While PACCAR sports a Zacks Rank #1 (Strong Buy), both Volvo and Fox Factory Holding carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

PACCAR has an expected long-term growth rate of 10.8%. Over the past year, shares of the company have moved up 2.1%.

AB Volvo has an expected long-term growth rate of 15%. Over the past year, shares of the company have gained 1%.

Fox Factory has an expected long-term growth rate of 15.8%. Shares of the company have risen 31.3% over the past year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: PCAR , TSLA , FOXF , VLVLY

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