The Strategist

Tesla posts record loss in Q2 2018

08/02/2018 - 15:47

The US manufacturer of electric vehicles and solar panels Tesla Inc completed the quarter with a record loss once again, but its revenue exceeded forecasts, and the founder and head of the company Elon Musk said that he expects to receive profit in the near future.

Sam Felder
Sam Felder
As reported in the company's press release, the net loss in April-June increased to $ 718 million, or $ 4.22 per share, compared to $ 336 million, or $ 2.04 per share, for the same period a year earlier. The adjusted loss (excluding one-time incomes and expenses) was $ 520 million, or $ 3.07 per share, compared to $ 220 million, or $ 1.33 per share, a year earlier.

At the same time, revenue increased by 44.4%, from $ 2.77 billion to $ 4 billion.

Analysts polled by FactSet on average forecasted an adjusted loss of $ 2.88 per share on revenue of $ 2.77 billion.

During the conference call, Musk confirmed that Tesla plans to reach a profitable level in the second half of the year and to fix a positive cash flow. He also assured shareholders that the production of Model 3 is proceeding according to the plan, that the demand for this sedan remains high and that Tesla will not have to raise capital in the market in the near future.

Musk was quite reserved and apologized to two analysts, whose issues he rudely interrupted during the May teleconference. The CEO also answered questions from journalists.

The cash flow, taking into account the capital investments in the second quarter, turned to be negative once again, but the indicator improved significantly since the first quarter (minus $ 1.06 billion) and was more positive than the analysts expected ($ 900 million).

In a letter to shareholders following the results of the second quarter, Tesla announced that it plans to increase the production of Model 3 to 6 thousand cars a week by the end of August. In the third quarter 50,000 to 55,000 Model 3 sedans will be assembled. Also, the forecast for the Model S and Model X production was confirmed at 100,000 in 2018.

The company reduced the expected capex in 2018 - to $ 2.5 billion from $ 3 billion announced in May. In 2017, the investment was $ 3.4 billion.

Tesla's share price jumped by 9.3% during e-trading. The company's market cap has decreased by 13.3%, to about $ 50 billion, for the past 12 months. The US stock index Standard & Poor's 500 for this period rose by 13.6%.