A Tesla Roadster Sport. (Image credit: Getty Images via @daylife)
Shares of momentum darling
The up-and-coming auto maker reported non-GAAP net income of $15.9 million, or 12 cents per share. Non-GAAP reporting includes the company’s unique accounting standards for leases, which allows Tesla to book the money anticipated over the life of a lease up front rather than as drivers pay each month. Non-GAAP revenue was $602.6 million, up 9% from the previous quarter. The non-GAAP consensus estimate was 8 cents per share.
Using GAAP standards, Tesla reported a net loss of $38.5 million, or 32 cents per share. Revenue was $431.3 million, up 6% from the prior quarter and 7.6 times revenue for the same period last year.
Eclectic vehicle tax credits brought in $10 million this quarter, compared to $51 million the prior quarter. The company calls the sharp drop "anticipated" and says it is related to sales shifting to Europe as well as U.S. states that do not award the ZEV -- zero emission vehicle -- credits. ZEV revenue excluded, non-GAAP revenue was up 18% from the prior quarter.
The company delivered 5,5000 Model S cars for a total of 19,000 owners. Of the deliveries, 1,000 were to Europeans. While growing, deliveries were slightly below expectations. Looking ahead, the company expects to deliver 6,00o vehicles in the fourth quarter for a a total of 21,500 vehicles this year.
"Model S gross margin may continue to make slight improvements over the next several quarters as we continue to drive down manufacturing costs," wrote CEO Elon Musk and CFO Deepak Ahuja in a letter to shareholders. They noted expectations to hit a 25% non-GAAP automotive gross margin in the fourth quarter.
"We plan to continue to increase productions over the next several quarters in order to keep up with the growth in demand.," Musk and Ahuja wrote. "Our suppliers are also ramping up their capacity to meet our production targets." Earlier this week Tesla announced an agreement with Panasonic for the Japanese electronics company to supply it with more lithium-ion battery cells. The deal will provide enough cells to power 300,000 new cars over four years.
Although shareholders are clearly disappointment with Tesla's latest results, don't cry for Musk yet. Shares are up 456.2% from the same period last year.
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