Author: Alan Ohnsman / Source: Forbes
Eight years into life as a public company Tesla remains every bit as volatile as it’s ever been, concluding an unusually woolly quarter with a loss per share that was worse than analysts expected, record production, plans for a Chinese plant and a promise that sustainable profitability is fast approaching.
Tesla bulls liked what they heard and helped the stock rise as much as 11% in after-market trading.
“Our goal is to be profitable and cash flow positive for every quarter going forward,” CEO Elon Musk said on a call with analysts. The company said gross margin on its critical new Model 3 was “slightly positive” in the quarter, but should reach 15% in the third quarter. Tesla said its overall automotive gross margin was 21% in the quarter.
Musk’s clean transportation and solar power company reported revenue of $4 billion that was a bit better than consensus expectations that Bloomberg put at $3.97 billion, but its loss per share was $3.06, well above a consensus estimate of $2.90. Along with the better revenue figure, the company reassured investors that hitting a goal of making 5,000 Model 3 sedans a week at the end of June wasn’t a fluke and that it managed to build approximately that number “multiple times” in July.
“Having achieved our 5,000 per week milestone, we will now continue to increase that further, with our aim being to produce 6,000 Model 3 vehicles per week by late August,” Musk and Tesla CFO Deepak Ahuja said in a letter to shareholders. “We then expect to increase production over the next few quarters beyond 6,000 per week, while keeping additional capex limited.
”Hitting that level of production is a key accomplishment for Tesla, yet Musk’s impulsive behavior during the quarter, including attacks on the media, investors who short the stock and a British diver who criticized his effort to aid the rescue of stranded Thai soccer players, were a distraction. Musk on Wednesday sought to make amends for one bit of erratic behavior: declining to take questions from analysts on the first-quarter results call that he’d deemed unworthy in favor of chatting with a Tesla fan.
“I’d like to apologize,” he told Sanford C. Bernstein & Co. analyst Antonio Sacconaghi, who he’d cut off during the call…
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