Investors shrug off Tesla’s CFO change

Carmaker’s shares recoup losses after falling nearly 5%

Tesla was in the spotlight on Wall Street on Thursday as investors tried to digest the results from the company’s latest earnings report and the surprise change in its chief financial officer position.

After falling nearly 5 percent in early trading Thursday, Tesla shares recouped nearly all of their losses and ended the day off by 0.6 percent at $307.02. The early negativity came from concerns about Tesla’s level of profitability, and how CFO Deepak Ahuja is leaving the company for the second time.

Ahuja originally did a stint in the company’s CFO chair before stepping down in 2015; he then returned in 2017. Ahuja will be replaced by Zack Kirkhorn, who has been with Tesla since 2010 and became vice president of finance last year.

Dan Ives, director of technology research at Wedbush Securities, said that it was no surprise to see some initial negative reaction to Tesla bringing in a new CFO now, “given all the balls that Musk and company are trying to juggle right now.” However, he also thinks that some of the initial market reaction was overrated.

“We are not overly concerned about speed bumps from this CFO baton handoff,” Ives said.

Late Wednesday, Tesla reported fourth- quarter sales of $7.23 billion, more than double the $3.29 billion in revenue it reported in year-ago period. Tesla’s earnings, excluding onetime items, totaled $1.93 a share, compared to a loss of $3.04 in the fourth quarter of 2017.

But while Tesla’s sales topped the $7.12 billion forecast by Wall Street analysts, its earnings fell short of the consensus estimate for a profit of $2.20 a share.

The results came on the heels of Tesla saying it would cut 7 percent of its workforce as it tries to improve its overall cost structure and release a version of the Model 3 sedan that will cost $35,000 as part of an effort to reach more middle-market car buyers. When Tesla announced the job cuts, in mid-January, Chief Executive Elon Musk said the company was facing a “very difficult” road ahead.