Tesla, TSLA Reports Second Quarter Earnings Beat: Stock Sells Off In After-Hours

TSLA Founder and CEO Elon Musk.

After the close of regular trading today, Tesla Motors, Inc. (NASDAQ: TSLA) reported its second quarter 2015 financial results. Tesla reported a per share loss of $0.48 on gross sales of $1.2 billion, up 40 percent from 2014 levels.

The consensus, among the 18 analysts polled by Thomson Financial Network, had been for a TSLA per share loss of $0.60 and sales of $1.17 billion. Both the Tesla EPS and sales numbers represent estimate beats, by $0.12 and $30 million respectively. Shares are trading down four percent to about $260 on the news, as of 4:45 p.m. ET.

Tesla management will host a webcast conference call discussing these results, scheduled for 5 p.m.

Tesla reports second quarter 2015 earnings.

Tesla routinely reports total vehicle deliveries in advance of its financial results. On July 2, Tesla announced that it had delivered 11,507 Model S vehicles in the second quarter; actual deliveries came in 11,532 this evening, a new company record. The results equate to an increase of 52 percent over the second quarter of 2014, when Tesla delivered just over 7,500 vehicles.

Tesla manufactures several models of electric cars, including the Tesla Roadster, Model S, and Model X. A new Tesla car, the Model 3, is expected to begin delivery in 2017.

Tesla’s goal is to build over 500,000 electric cars annually by 2020. To do this, Tesla will require more than the entire current supply of lithium ion batteries in the world. In order to create the supply it needs, Tesla has made a huge investment in its new Gigafactory. Telsa’s prowess in the production of lithium ion batteries has also lead to the introduction of the Powerwall battery for residential solar systems.

The investment in the capital structure for the Gigafactory, as well as new car models, from the ground up, has resulted in Tesla going back into the red. The company earned $0.14 per TSLA share in 2014. Current analysts’ estimates are calling for Tesla to break even next quarter and lose $0.09 per share for the full 2015 year. These numbers represent TSLA EPS decreasing by 100.0 percent next quarter and 164.3 percent for the full 2015 year.

The stock market is a forward-looking pricing mechanism, however. Even with this evening’s sell-off, perhaps even more so, market participants appear to be focusing on analysts’ Tesla EPS forecasts for 2016 and the coming five years, when TSLA EPS is expected to grow 3,766.7 percent and average 122.9 percent, respectively. Changes to analysts’ Tesla estimates are likely with this evening’s announcement and conference call.

Tesla (NYSE: TSLA) shares since IPO.

Since first being offered in 2010, Tesla stock has returned 1,284 percent. Over the same period, the Dow Jones Industrial Average (DJI) returned 81 percent. Tesla stock returned 5.3 percent over the past 12 months, giving TSLA shares a relative strength rating of 81. Tesla stock has outperformed the stock of 81 percent of other companies in the broad market.

Going into this evening’s announcement, Tesla paid no dividend and carried about $2.65 billion in debt, giving it an incredibly high debt to equity ratio of 320 percent. It is imperative that Tesla meet 2015 and 2016 estimates if it is to continue to find investor favor and carry such high levels of debt.

Sixteen research firms publish prices targets for Tesla stock. The average TSLA stock price target is $287.88. TSLA stock targets range between $178 and $400. There are 126.4 million Tesla shares outstanding.

[Tesla CEO Photo by Joe Raedle / Getty Images – Tesla Photo by Kevork Djansezian / Getty Images]