Thursday morning, it was mixed on Wall Street, with cross-currents in various sectors of the market that caused stock price indices to move in different directions. Starting at. 11:35 EDT was Dow Jones Industrial Average (DJINDICES: ^ DJI) up 144 points to 26,362. S & P 500 (SNPINDEX: GS GSPC) was unchanged at 2,874, while Nasdaq Composite (NASDAQINDEX: [IXIC) fell 17 points to 7.879.
] Tesla (NASDAQ: TSLA) moved sharply lower after the company announced its production and delivery numbers for the first quarter of 201
Tesla hit the brakes
Shares of Tesla were down 9% after Electric Vehicle Specialist reported their latest calculations for the first quarter. Tesla said it produced 77,100 vehicles during the period, including 62,950 model 3 cars and 14,150 in combined units of models S and model X variants. However, deliveries amounted to 63,000 cars, consisting of 50,900 model 3s and 12,100 of the other two models. Although it was more than twice as much as Tesla delivered during the first quarter of 2018, it was down by more than 30% compared to deliveries during the period ending three months ago.
Tesla pointed to ongoing challenges faced in large part by a quarter. A major increase in deliveries to Europe and China created new logistical obstacles for Tesla to overcome, and the company showed that it had only delivered about half of the quarter's volume with just 10 days to go in the period. Despite the best possible effort, Tesla was unable to bring all these vehicles to customers and said it had around 10,600 units still in transit worldwide on 31 March.
As a result, Tesla warned that net revenues will have a negative impact. Numerous adjustments to the pricing of Tesla vehicles will also contribute to weaker numbers than many would have liked to see.
But two major questions remain unanswered. First, it is unclear how Tesla will take up the situation for a long time. With only one factory in the Bay Area, the electric car manufacturer sees a high probability that production will return deliveries in the current quarter. In addition, model S and X deliveries have gone significantly, it is a real concern that the cheaper model 3 could cannibalize sales of higher prices, and beat Tesla's long-term profit expectations.
Constellation picks pot over wine
Stocks of Constellation Brands were higher by 4% after alcoholic beverages company's release of fiscal fourth quarter results. Constellation's earnings came out better than expected, reflecting strong demand for Corona and Modelo beer brands.
In a major strategic shift, Constellation said it would sell some of its weaker results. In particular, the company specified 30 different brands of wines and spirits that it will sell to the E & J Gallo Winery for private dollars for $ 1.7 billion. The sale will not completely determine Constellation's portfolio of wine brands that many had previously expected, but it will help improve the quality of the remaining stocks as the company focuses on its higher-end higher-margin products.
Constellation's beer business had dramatically surpassed the offer of wine and spirits, and the company has also recognized the secular threat that legalization of marijuana represents the broader alcohol industry. Many of the Constellation competitors have struggled to get close to the match of Modelo and Corona. Meanwhile, Constellation's stake in Canopy Growth has already been highly profitable from an investment point of view, and the beer producer is still optimistic about the prospects for cannabis. Investors agree, and they like the sophistication they see in Constellation's emphasis ahead.