Tesla (TSLA, Financial) shares closed 8.23% lower Thursday after plunging as much as 10.32% when the electric carmaker announced that it missed targets for deliveries in its fiscal first quarter.
The company said it delivered 63,000 vehicles, a 110% increase from the same quarter last year but a 31% decrease from the fourth quarter. The number also fell short of analysts’ expectations of 76,000 deliveries. Tesla produced 77,100 vehicles.
The company attributed the shortfall to a surge in demand from Europe and China, combined with unnamed first-time challenges, for delivering only half of its orders by March 21, 10 days before the quarter ended. The delay pushed “a large number” of deliveries to the second quarter.
Tesla began shipping its model 3 to China and Europe in February. It did not say how many vehicles were delivered overseas, saying only that orders “at times exceeded 5x that of prior peak delivery levels” and that 10,600 vehicles remained en route to global customers at the end of the first quarter. The company has only one factory producing vehicles, located in the San Francisco Bay Area.
For the full year, Tesla reaffirmed its guidance for between 360,000 and 400,000 vehicle deliveries. Lower-than-expected delivery figures would negatively affect first-quarter net income, the company said. It had already in the fourth quarter forecast a “predictable dip” in its revenues and earnings for the first quarter due to the higher production than deliveries.
“Our optimistic target is to achieve a very small GAAP net income in Q1, but that will require us to successfully execute on many fronts including handling logistics and delivery challenges in Europe and China,” Tesla said in its fourth-quarter results.
Daniel Ives, a Wedbush analyst with an outperform rating on the stock, said in a letter Thursday morning: “While we and many on the Street were expecting a soft quarter and believe profitability will return to Tesla starting in the 2H with 2Q profitability at this point still a wild card depending on the demand/cost cutting trajectory at the company, last night's news puts another near-term overhang over the name. We also believe the chances of a capital raise in the $2 billion/$3 billion arena now go from 30%-35% to 50%-55% given the current cash situation and lower profitability trajectory going forward.”
Ten investors tracked by GuruFocus have holdings in Tesla, with Spiros Segalas (Trades, Portfolio)’ 1.06% position being the largest. Ron Baron (Trades, Portfolio)’s holding, at 2.8% of his reported portfolio, represents the largest portfolio weighting. Three investors started Testla positions in the fourth quarter: Ken Fisher (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Jim Simons (Trades, Portfolio). Five reduced their positions, with Caxton Associates (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) making the largest cuts.
The stock has declined 12% over the past year and closed at $267.78 Thursday. Its price-book ratio of 10.09 is near a two-year low, and its price-sales ratio at 2.33 is near a 10-year low.
Read more here:
Bill Ackman Trounces S&P 500 in 1st Quarter
Also check out:
