Tesla Loss Widens, but Model X Production Revving Up
Tesla Motors Inc., the maker of luxury electric vehicles, posted a wider loss of $229.9 million in the third quarter as costs to launch the Model X sport-utility by late September led to a 10th-consecutive quarter of red ink.
But shares climbed sharply after hours, up 7.3% to $223.56, as the company forecast fourth-quarter deliveries that showed the Model X could still hit its sales targets.
Revenue for the Palo Alto, Calif.-based company rose 10% to $936.8 million, but heavy development costs offset the benefit of steady volume growth. The Model X, the auto maker's second volume vehicle, went on sale late in the quarter and didn't affect the results.
Tesla's adjusted operating loss was 58 cents per share, deeper than the 50-cent loss anticipated by analysts. The adjustments account for employee stock grants and deferred revenue for the lease program it uses for many of its sales.
Still, Tesla predicted that it would deliver 17,000 to 19,000 vehicles in the fourth quarter, a good sign that production of the Model X will ramp up significantly and it could still achieve its sales targets for the year. The rate of production and sales of the new model is of great concern because the company already has invested hundreds of millions of dollars in preparing for the launch and it needs the revenues from sales to pay for its continued growth.
Tesla's deliveries rose 49% to 11,603 in the third quarter, putting its annual deliveries through September at 33,140. Tesla has already lowered its sales forecast to 50,000 to 55,000 from 55,000. Tesla's forecast for deliveries puts it at 50,000 to 52,000 in deliveries for the year.
Tesla shored up its cash balance in the quarter with a share sale that netted $750 million. Nonetheless, its cash supply of $1.4 billion is considerably lower than the $2.37 billion it held on Sept. 30, 2014. It consumed nearly $450 million in cash in the quarter, mostly for capital expenses.
By Mike Ramsey