Tesla Stock: Third-Quarter Results Disappoint

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In a matter of minutes, about $2 billion of Tesla Motors' market capitalization was slashed this evening. The stock fell as much as 10% in after-market trading hours after the company posted its third-quarter letter to shareholders [link opens in PDF].

Tesla reported non-GAAP EPS of $0.12 and non-GAAP revenue of $603 million, up 9% sequentially. Tesla beat EPS and revenue estimates, with a consensus for $0.11 and about $535 million for EPS and revenue, respectively.

Vehicle sales were basically in line with Tesla's guidance: just over 5,500. Tesla had guided for "slightly over" 5,000 Model S deliveries in Q3. The company reached a weekly vehicle production rate of 550.

Tesla's automotive non-GAAP gross profit margin (excluding zero-emission vehicle, aka ZEV, credits) continues to improve rapidly, up to 21% from 14% last quarter. Management says they remain confident Tesla will reach its target automotive gross margin of 25% by Q4. Even more, management now says that Tesla may see further progress beyond 25%.

Going forward, Tesla expects to deliver "slightly under 6,000 Model S vehicles in Q4." That brings Tesla's expectations for full-year deliveries to 21,500 -- boosting the company's full year guidance by 500 vehicles.

Tesla says research and development costs should accelerate by about 25% in Q4 as Tesla accelerates "product development efforts on Model X and Model S enhancements."

To get more details on Tesla's third-quarter results, tune in live to Tesla's third-quarter earnings call, or if you miss it listen to a replay here here.


The article Tesla Stock: Third-Quarter Results Disappoint originally appeared on Fool.com.

Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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