Tesla Motors Inc (NASDAQ:TSLA) Misses Earnings, China Unit Leads The Way

Tesla Motors Inc (NASDAQ:TSLA) missed earnings estimates and pointed fingers at its fledging china unit. The company reported a per share loss off 13 cents versus analysts’ expectations of a 32 cent profit. The number that disappointed the moist was vehicle deliveries. The company had expected to deliver 11,200 new vehicles to buyers but instead came up short with only 9,834. The company also produced 12,000 cars which is causing issues.

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Spare No Expense

In the company’s earnings call they stated they are willing to spend whatever it takes to right the ship including capital expenditures.The company plans to spend up to $11 billion in the coming year2015.This was the second straight quarter Tesla Motors Inc (NASDAQ:TSLA) has missed earnings estimates and that is causing some analysts to lose faith. They cite the recent lowering of gas prices will hurt the company’s efforts to market and sell its signature Model 3 mass market car. As gas prices become more affordable companies that have suffered from the rise of electric cars may see resurgence, at Tesla’s expense.

Bad Weather

Another reason the company said it had delivery issues was bad weather, recipients being on vacation and shipping issues. This can affect the car maker’s customer satisfaction ratings as buyers wait while inventory sits on lots. Tesla Motors Inc (NASDAQ:TSLA) also plans to release its Model X SUV this summer. But demand might be tapered as gas prices encourage buyers to stick with more traditional models. The company kept guidance and reiterated its target of 55,000 cars in 2015. The company also plans to immediately address the China unit woes. Sales were very sluggish and not close to predictions. Tesla CEO, Elon Musk, stated that jobs will be lost and the unit overhauled due to the shortcomings.

Technicals

The stock sold off the day after the actual earnings were released but bounced quickly. Momentum slowed but the volume was enormous and the stock had a good wash. Buy and sell action remains neutral giving no solid indications.

Culver Stinson

Culver Stinson

Stinson is US Markets Daily’s Senior Producer for News & Public Affairs.