Tesla Inc. shares fell more than 9% late Wednesday after Silicon Valley car manufacturer reported second-quarter results well below Wall Street expectations despite coming to the heels of a record sale for the company.
TSLA, + 1.81%
said it lost $ 408 million, or $ 2.31 per share, in the quarter, compared to a loss of $ 718 million, or $ 4.22 per share in the quarter the previous year.
Sales increased to $ 6.3 billion, compared to $ 4 billion a year ago.
Adjusted for one-time items, Tesla lost $ 1
Analysts asked by FactSet had expected Tesla to report an adjusted quarterly loss of 35 cents per share on sales of $ 6.5 billion.
Earlier this month, Tesla reported record sales for the second quarter that were above Wall Street expectations. This had strengthened the stock in recent sessions and made investors expect a smaller quarterly loss.
"We wanted to characterize the results as demoralizing," said Garrett Nelson, CFRA analyst. Even after record turnover in the second quarter, Tesla lost $ 1.12 per share, the gross margins deteriorated, and one of the few bright spots was the "strong" free cash flow, he said.
"The results will make investors go back and question the company's path to profitability," he said.
It was unclear whether Tesla confirmed the sales prospects for 2019. In a letter to investors announcing the results, Tesla said it "simplified" its approach to guidance and that it "works to increase our deliveries sequentially and annually," with some seasonal fluctuations, a goal "consistent with our previous guidance of 360,000 to 400,000 vehicle deliveries this year."
See also: Sale of Tesla's high-end Model S drops in key markets  The previous guide had been for sale of 360,000 to 400,000 cars this year, meaning more than 200,000 cars will have to be sold in the third and fourth quarters to hit the low end of expectations, just as federal tax credits fall and third-quarter sales expectations weaken.
The company reiterated its goal of returning to GAAP profitability in the third quarter and subsequent quarters, "although continuous volume growth, capacity expansion and cash generation will remain the main focus," the letter said.
Model Y will be made at Tesla's plant in Fremont, California, fall 2020, according to the letter. Local production of Model 3 in China is on track by the end of the year, it says. Tesla also "accelerates" the efforts in Europe and hopes to announce a location for a factory there "in the coming quarters."
Tesla also cut investments to between $ 1.5 billion and $ 2 billion, from a previous $ 2 billion to $ 2.5 billion guidance. It asked for gross margins of around 19% for all vehicles despite recent price cuts; in the previous quarter, it had said that the model 3's gross margin was around 20%.
Tesla previously adjusted his month's vehicle line again, got rid of cheaper versions of Model S and Model X, and lowered the price of Model 3.
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Tesla shares have fallen more than 20% this year, in contrast to gains of nearly 20% and 17% for the S&P 500 index
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and Dow Jones Industrial Average