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Tesla Q1 Sales Drop, Fails To Gun It With 6,457 Cars

By Donna Howell , 2014-05-08 12:00:00

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Tesla Motors (TSLA) shares fell sharply after hours Wednesday as the luxury electric car maker's first-quarter earnings and revenue only modestly beat the average of some wildly divergent analyst views.

CEO Elon Musk also announced that Tesla has a signed letter of intent with Panasonic to build a battery "Gigafactory," with groundbreaking expected to start next month.

Tesla delivered 6,457 Model S vehicles in Q1, slightly ahead of its guidance for 6,400. Wall Street expected a mild beat but the company couldn't blow much past that number, said Dougherty & Co. analyst Andrea James earlier in the day, because its battery cell supply from Panasonic is currently constrained.

Yet analyst views for Q1 performance had been "all over the place" which made the consensus "kind of irrelevant," James said. With revenue predictions ranging from $637 million to $808 million, "you could drive how many Teslas through that gap?" The variance was about 1,710 cars if you assume an average selling price of $100,000, she figured.

Ultimately for Q1, Tesla took in $713 million in revenue ex items, up 27% year over year and ahead of analyst consensus for $699 million, according to a Thomson Reuters poll. That's a big deceleration from prior quarters. (GAAP revenue rose 10% to $620.5 million.)

Adjusted earnings per share came in flat at 12 cents. That was two pennies ahead of consensus — the estimates ranged from a loss of 7 cents to a gain of 40 cents.

With Tesla failing to blow out the consensus, shares fell 7% late after closing down nearly 3% to 201.35 in the regular session.

No Shanghai Surprise

For Tesla "estimates always are all over the place — let's call a spade a spade," said Wedbush Securities analyst Craig Irwin, who told IBD ahead of the release that he didn't think it would be a "juicy quarter." The only thing he knew of that could've potentially pushed the stock back to the highs of a few months ago was if Tesla predicted some outsized number of deliveries into China for the year, such as beyond 5,000, he said.

Tesla did not, though Musk said in the shareholder letter that "we plan to expand in China as fast as possible because we believe the country could be one of our largest markets within a few years."
 
On the conference call with analysts, Musk said, "I really don't think we've got any kind of demand challenge in China ... actually I think we'll have to limit the number of cars we send to China."

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