Tesla slashes its outlook

Elon muskPatrick Fallon/ReutersTesla CEO Elon Musk.

Tesla just reported second quarter earnings and cut its outlook for the year.

In the second quarter, Tesla reported a smaller than expected loss per share but its vehicle delivery outlook for 2015 disappointed.

In after hours trade on Wednesday, the stock was down as much as 8%. Near near 4:50 pm ET, however, the stock was down just 2%.

In the second quarter, Tesla lost $US0.48 per share on an adjusted basis. This was less than expected. Revenue in the second quarter came in in-line with expectations at $US1.2 billion.

Tesla said it expects to deliver between 50,000-55,000 vehicles in 2015, lower than the 55,000 vehicle deliveries it previously forecast. In his preview of Tesla’s earnings, Business Insider’s Matt DeBord noted that the 55,000 vehicle full-year delivery number was the one that really mattered for investors.

In the second quarter, Tesla said it delivered 11,532 vehicles. The company expects to deliver roughly the same number in the third quarter.

Via Bloomberg, here’s an overview of what Wall Street was looking for:

  • Adjusted earnings per share: ($US0.59)
  • Revenue: $US1.19 billion
  • Vehicle deliveries: 10,000-11,000
  • Full-year vehicle deliveries: 55,000

In its release, the company said it still expects its new Model X to begin deliveries late in the third quarter of this year.

As for what the company had to say about why it cut its delivery outlook, Tesla said in its letter to shareholders:

While our equipment installation and final testing of Model X is going well, there are many dependencies that could influence our Q4 production and deliveries. We are still testing the ability of many suppliers to deliver high quality production parts in quantities sufficient to meet our planned production ramp. Since production ramps rapidly late in Q4, a one-week push out of this ramp due to an issue at even a single supplier could reduce Model X production by approximately 800 units for the quarter. Furthermore, since Model S and Model X are produced on the same general assembly line, Model X production challenges could slow Model S production. Simply put, in a choice between a great product or hitting quarterly numbers, we will take the former. To build longterm value, our first priority always has been, and still is, to deliver great cars.

Tesla still expects capital expenditures to total $US1.5 billion this year, owing to an increase in production, Model X development, and building its new Gigafactory among other things.

You can read Tesla’s full letter to shareholders here »

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