Tesla Reports First Quarter Loss, Musk Sees Profits ahead
Tesla Inc reported 1st-quarter loss after the bell on Wednesday as the CEO promised restructuring plans to achieve profit goals.
In the quarter ended March 31, Tesla’s net loss plunged to a record $784.6 million, or $4.19 per share, from a loss of $397.2 million, or $2.04 per share, a year ago.
Excluding expenses for stock-based compensation and other items, Tesla lost $3.35 per share. This was narrower than the loss of $3.58 billion per share a year ago.
However, revenue increased to $3.41 billion from $2.7 billion a year ago. It also blew past analysts’ estimates of $3.22 billion.
Additionally, the company said it ended the quarter with $3.2 billion in cash after spending $655.7 million in quarterly capital expenses.
While Tesla continued to burn through cash at a faster rate, its burn rate was slower than analysts had expected. But questions still loom about whether Tesla will need to raise more money in the future.
On a conference call Wednesday, Chief Executive Elon Musk said the company doesn’t want to raise capital at this time. He said it wasn’t needed.
On the other hand, the electric carmaker’s cash dwindled to $2.7 billion by the end of this quarter. As it cut its projected capital expenditures for the year, Tesla still expects to spend $3 billion. It was lower from a prior estimate of $3.4 billion.
Instead, Tesla is focusing on improving Model 3 production.
Tesla to make positive cash flow in the 3rd quarter
The future of the company depends on the Model 3, and it said it had largely overcome production bottlenecks. Musk promised a dramatic turnaround that would reverse losses and generate positive cash flow in just a few months.
“It’s high time we became profitable,” said Musk. He promised a restructuring this month reach his profit goals. “The truth is you’re not a real company until you are, frankly. That’s our focus right now.”
Mush plans to shut down its Fremont, California factory for 10 days in the 2nd quarter. However, he said Tesla will meet the production target of 5,000 Model 3s per day by the end of June. In addition, that will turn a profit in the 2nd half of the year.
Furthermore, Tesla shares slumped slightly after the earnings announcement. It took a steep fall immediately after Musk cut analysts’ questions short. That cost the company over $2 billion in market capitalization.
“These questions are so dry. They’re killing me,” Musk said after an analyst questioned the percentage of Model 3 reservation holders have started to configure options for their cars.
Tesla shares plunged 6.36% to $281 in pre-market trading Thursday.
