Tesla says it will ride to a profit next quarter
Tesla reported another big loss for the second quarter. But it burned less cash along the way to ramping up production of its “bet the company” electric sedan, the Model 3.
The $717.5 million loss was larger than analysts had expected, slightly higher than the previous quarter's $709 million loss and more than double the $336.4 million loss in the same quarter a year earlier. Tesla reiterated its intentions to achieve profits in the third and fourth quarters and beyond.
Tesla said its operating cash flow improved from negative $784.6 million in the first quarter to a negative $742.7 million in the second.
Investors reacted positively to the report, pushing Tesla shares up in after-hours trading. The stockclosed Wednesday up $2.70, or 0.9 percent, to $300.84 before the news came out, giving the company a market value of about $51 billion.
One analyst expressed relief that Tesla CEO Elon Musk stuck to seemingly achievable goals.
“One of the things I like was the more muted tone,” Efraim Levy of CFRA Research said. “They didn't stretch goals and make hard targets. They said they'd get to 10,000 a week as soon as possible. A more cautious Elon Musk is a good thing.”
But one short seller said he'll stick to his bet that the company's stock is grossly overvalued.
“Tesla is a structurally unprofitable business,” Mark Spiegel of Stanphyl Capital said. “Their expenses are way too high to reach consistent profitability.”
So far this year, the company has lost more than $1.5 billion.
In a conference call after the earnings release, Musk assured stock analysts on fixes to the assembly line.
He also apologized to three analysts for belittling their questions and cutting them off with no answers in the first-quarter conference call in May.
“I want to apologize for being impolite on the prior call.” He said he was sleep deprived, but that's “no excuse for bad manners.”