Tesla Rolls Out Blowout Earnings in Q2; Shares Surge

By Yasin Ebrahim

Investing.com - Tesla (NASDAQ:TSLA) on Wednesday reported second-quarter earnings and revenue that markedly beat analysts' forecasts and the electric automaker said it was on target to exceed 500,000 annual deliveries despite recent production interruptions.

Tesla shares gained 5% in after-hours trade following the report.

Tesla announced earnings per share of $2.18 on revenue of $6.04B. Analysts polled by Investing.com anticipated EPS of $-0.19 on revenue of $5B.

"Our profit improved sequentially due to fundamental operational improvements. Additionally, we experienced costs associated with factory shutdowns, which were offset by actions taken during the quarter to reduce expenses," Tesla said.

The company, however, saw revenue decline in its core automotive business, though a 21% rise in regulatory credit kept downside momentum in check.

Automotive revenue fell 4% to $5.2bn for the quarter year-on-year as deliveries fell 5% for the quarter from a year earlier.

Model 3/Y deliveries rose 3% to 80,277 3% and Model S/X deliveries fell 40% for the quarter from a year earlier.

Looking ahead, the company said it had the capacity installed to exceed 500,000 vehicle deliveries this year, despite recent production interruptions. "While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target," it added. "We should have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses."

Tesla also said it remained on track to roll out deliveries of its Model Y at its Gigafactories in Berlin and China in the new year.

"We are continuing to build capacity for Model Y at Gigafactory Berlin and Gigafactory Shanghai, and we remain on track to start deliveries of these vehicles from both locations in 2021. The next US Gigafactory site has been selected and preparations are underway. Tesla Semi deliveries will also begin in 2021. We continue to significantly invest in our product roadmap."

Tesla has notched four consecutive quarters of profit, paving the way for its inclusion in the S&P 500.

"Tesla has come up with a strong set of numbers, far exceeding analysts’ expectations for the second-quarter. Going forward, Tesla continues to remain optimistic about its targets, including the start of Model Y deliveries at both Shanghai and its Berlin Gigafactory which is under construction," Investing.com analyst Haris Anwar said. "These are quite bullish signals and provide justification for the stock's powerful rally this this year."

Tesla shares are up 280% from the beginning of the year, still down 11.32% from its 52 week high of $1,793.02 set on July 13. They are outperforming the Nasdaq which is up 19.32% from the start of the year.

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