Tesla (TSLA, Financial) shares ended the day up 0.41%, settling lower after the market reacted positively to the company’s first-quarter earnings beat.
The electric vehicle maker had $3.41 billion in revenues, an increase from $2.70 billion a year earlier and higher than the $3.22 billion forecast by Thomson Reuters.
Its net loss deepened to $784.63 million versus $397.18 million a year ago. Net loss per share totaled $4.19, versus $2.04 a year ago. Its adjusted net loss was $3.35 per share, beating estimates of $3.58 per share.
Tesla ended the first quarter with $2.7 billion in cash and expects to spend less than $3 billion in capital expenditures for the second quarter.
Production of its Model 3 sedan, which has been closely watched by Wall Street, peaked at 2,270 vehicles per week in the last two weeks before a planned shutdown in mid-April, falling short of its goal of 2,500 per week that it set in its fourth-quarter letter. The company aims to achieve production of 5,000 units per week in roughly two months, “although our prior experience has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time because of the exponential nature of the ramp.”
In the fourth quarter, Tesla said it aimed to reach 5,000 Model 3 units per week by the end of the second quarter.
Reaching the goal will require the company to about 10 days of downtime in the first quarter, including its days off in April, as it did in the first quarter, the company said. The days off will be needed to correct bottlenecks and enhance production levels.
Tesla also expects to have gross margins of 25% on the Model 3 over the long term, though they will be lower over the medium term as manual labor compensates for cut backs in automation in some areas. Higher material costs due to tariffs, commodity prices and weaker U.S. dollar will also negatively affect margins.
