Tesla stock down 7 per cent after dismal second quarter outlook
08 May 2014
Tesla Motors Inc led by billionaire Elon Musk, yesterday offered an outlook for the second quarter that disappointed some investors, sending shares of the electric car maker down more than 7 per cent in after-hours trading, Reuters reported.
Posting a higher-than-expected first-quarter operating profit, the company said its operating automotive gross margins in the current quarter would increase slightly.
S&P Capital IQ analyst Efraim Levy described the outlook a disappointment, adding investors had hoped for something better.
The Palo Alto, California-based company posted a first-quarter net loss of almost $50 million, as against its first quarterly profit a year ago.
The electric car maker said it would spend up to $850 million this year to increase production capacity of its Model S luxury electric sedan, develop the Model X crossover vehicle and start construction of a new lithium-ion battery plant, called the "gigafactory."
It said that would see the company end up with a negative free cash flow for 2014.
Tesla's shares fell recently and at the close of the market yesterday were down over 20 per cent from an all-time high of $265 in mid-February.