Tesla Stock Price Drops Following Third-Quarter Loss

Tesla Stock Price Drops Following Third-Quarter Loss

Tesla just revealed its Q3 financial results and investors aren’t responding positively to the news that the company posted a $38 million loss. Their stock is down around 10 percent, as the company reported adjusted earnings of just $0.12 per share. 

The company delivered 5,500 vehicles this quarter, exceeding its expectations of 5,000, but still it reported a loss of $0.32 per share, based on Generally Accepted Accounting Principles (GAAP). This performance is worse than the $0.25 per share loss that was expected.

The Q3 results now point out that the company is making 550 vehicles a week, and is on target to deliver 6,000 vehicles in the fourth quarter. Overall the company reported that its non-GAAP gross margins increased by 22 percent, or 24 percent on a GAAP basis.

With a GAAP revenue of $431 million Tesla again performed below analyst expectations, who were looking for revenue of more than $554 million. Overall, the company posted a $38 million dollar loss.

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With the fourth quarter ahead of them, Tesla hopes to close out the year with 21,500 vehicles delivered worldwide for all of 2013. The company is hoping to increase the gross margins on the Model S to 25 percent, with a focus on selling the car with more options. With the Model S now available in North America and Europe, Tesla is pursuing China next with deliveries to start in the first quarter of 2014.

With the new Model X crossover slated to hit the market next year,Tesla also announced that it will increase R&D spending by about 25 percent to accelerate the company’s production efforts.

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