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Tesla Needs Shares Rise Despite Losses

Posted: 6th November 2014
Type: Blog

Shares in Tesla Motors Inc rose by nearly 8% in after-hours trading on Wednesday night (5th November) after the electric-car maker exceeded analysts’ expectations for third-quarter results.

The innovative automaker said its quarterly loss nearly doubled from a year ago to $75m, as manufacturing, sales and development expenses increased to meet rising demand for its Model S sedan.

The company said production of its next vehicle, the Model X crossover, will be delayed again by several months. It did not give a reason for the delay. Its shares rose after-hours, however, as non-GAAP income of 2 cents per share beat Wall Street’s consensus view of a loss of 1 cent per share.

Tesla said its net loss was 60 cents a share, compared with a net loss of 32 cents a year ago.

Tesla’s third-quarter revenue doubled to $852m, while operating expenses climbed to $291m.

The company delivered a record 7,785 Model S saloon cars in the quarter, most of them in North America.

In a shareholder letter , chief executive Elon Musk said Tesla still expects to build 35,000 Model S sedans this year and deliver 33,000. Model S sales next year are expected to rise 50%, to nearly 50,000.

Tesla expects to maintain that annual growth rate on the Model S “probably for several years to follow,” Musk and the chief financial officer, Deepak Ahuja, said in the shareholder letter.

Research and development spending climbed as Tesla added a new dual-motor version of the Model S and readied the Model X crossover for production later in 2015. Tesla originally planned to introduce the Model X in 2013, but has delayed its launch at least three times.

The company said it was investing an unspecified amount to increase production at its Fremont plant in Northern California to more than 2,000 vehicles per week by the end of 2015.

Tesla has earmarked about $350m in the fourth quarter for capital expenditures, including the Fremont plant expansion and for construction of a multibillion-dollar battery factory it is building in Nevada with Panasonic.

Tesla shares were up 7.8% at $249 in after-hours trading on Wednesday after closing at $230.97.

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