Tesla posts $408M loss; stock plummets
SAN FRANCISCO— Tesla suffered a loss of $408 million during its latest quarter as the company continues to struggle to prove it can make money while producing electric cars at prices that a mass market can afford.
The setback announced Wednesday already had been telegraphed by Tesla CEO El on Musk, but it still underscored an ongoing challenge that helps explains why the company's shares have plunged by more than 20% so far this year while t he St a ndard &Po or' s 500 index has surged by 20%.
On the upside, Tesla' s second-quarter revenue climbed 47% from the same time last year to $5.2 billion. The company also generated $614 million in cash during the quarter, helping to fat ten its bank account to $5 billion through June. That's money Tesla is going to need to repay i ts massive debt and other bills, unless it can't stop hemorrhaging red ink.
In a sign that investors are still worried about Tesla's future prospects, the company' s stock dropped by nearly 10% to $239 in extended trading after the results came out.
Tesla has sustained losses of more than $6 billion since its inception, but Musk promised a year ago that the road ahead would be paved with nothing but profits. The Palo Alto, California, company made good on that pledge with a profit of $451 million during the final half of last year, but now has posted successive quarterly losses totaling $1.1 billion during the first half of this year.
The loss of $2.31 per share for the April-June quarter was worse than the $1.27 per share loss on a GAAP basis that analysts had expected, according to Fact Set. It also came despite Tesla selling more electric cars —95,356— than in any other quarter in its history. The company remains behind the sales pace needed to realize Musk's goal to deliver 360,000 to 400,000 cars this year.
In a shareholder letter released with its second- quarter result, Tesla said it will focus more on increasing its manufacturing capacity and its car-delivery cars instead of hitting a specific financial target. The company said it will "aim" for a profit in the current quarter, without making an iron-clad commitment to do so.
Just reaching the lowerend of Musk's car-delivery goal for this year may prove difficult because the U.S. has reduced its tax incentive for electric car purchases before phasing it out entirely at the end of the year.