Most stocks fell Thursday, but the Dow Jones Industrial Average (DJINDICES: ^DJI) set another record while the S&P 500 (SNPINDEX: ^GSPC) posted a small decline.
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Today's stock market
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Oil exploration and production stocks fell today; the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT: XOP) tumbled 3.5%. Utilities continued their recent positive performance, with the Utilities Select SPDR ETF (NYSEMKT: XLU) up 0.5%.
As for individual stocks, Tesla (NASDAQ: TSLA) rose on a quarterly report and Teva Pharmaceutical Industries (NYSE: TEVA) plunged thanks to disappointing earnings and guidance.
Tesla's still on a roll
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Tesla reported its progress on the production ramp of the Model 3 and sales of its older models in its second-quarter earnings yesterday after market close. The company delivered the first units of its mass-market Model 3 on schedule last week and reiterated previously announced plans to produce 1,500 vehicles in Q3 and achieve production of 5,000 vehicles per week by the end of the year. Shares finished the day with 6.5% gain.
Observers had grown concerned that the arrival of the Model 3 would dampen demand for the higher-priced Model S and Model X, but so far, those worries seem to be unfounded. The order rates for those two models were 15% higher in July than the average for Q2, leading the company to predict higher deliveries in the second half versus the first, despite taking over 1,800 net new reservations per day for the Model 3.
Revenue was up 120% to $2.79 billion on a 53% increase in vehicle deliveries and the addition of SolarCity sales from the merger last year, compared with a consensus expectation of $2.51 billion. Tesla posted an adjusted loss per share of $1.33, while analysts were expecting a $1.83-per-share loss. Tesla has $3 billion in cash on hand and spent $1.5 billion on capital expenditures in the first half.
The company highlighted the start of deliveries of its Solar Roof energy-generating roof tiles, but investor attention is focused on the ramp of the Model 3 and the cash needed to accomplish it. Tesla also teased about its next vehicle, ending the report by saying, "We remain confident in our plans and look forward to the upcoming unveiling of the next exciting addition to our portfolio of electric vehicles -- Semi Truck."
A bitter pill for Teva shareholders
Generic-drug maker Teva Pharmaceuticals reported second-quarter revenue and earnings that missed expectations and heightened worries about falling prices for its drugs in the U.S. Revenue was up 13% from last year to $5.69 billion, but non-GAAP earnings per share fell 18% to $1.02. Analysts were expecting the company to earn $1.06 per share on sales of $5.72 billion. As a result, shares plummeted 24%.
Teva singled out performance in the U.S. generics business as a source of concern. Interim CEO Dr. Yitzhak Peterburg said in the press release: "In our U.S. Generics business, we experienced accelerated price erosion and decreased volume mainly due to customer consolidation, greater competition as a result of an increase in generic drug approvals by the U.S. FDA, and some new product launches that were either delayed or subjected to more competition."
Gross profit margin for the generics segment fell from 44.9% to 42.8% since last year. U.S. sales of Copaxone -- Teva's biggest-selling non-generic drug -- declined 12% on negative net pricing effects. The company lowered its guidance for full year, now forecasting non-GAAP EPS of $4.30 to $4.50, as compared to guidance that was reaffirmed three months ago of $4.90 to $5.30. Teva also cut its dividend 75% to 8.5 cents, adding to shareholders' woes.
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