Tesla lower-than-expected Q1 operating performance

Tesla reported its first loss on an adjusted basis since the second quarter of 2018.

The Palo Alto, California-based company posted an adjusted loss per share of $2.90 for its fiscal first quarter. This was wider than the $1.30 loss per share consensus analysts were expecting, according to Bloomberg-compiled data. In the same quarter last year, Tesla lost an adjusted $3.35 per share.

Wall Street’s revenue estimates after posting $4.5 billion in revenue. Additionally, the company missed analysts on the bottom line by a wide margin with a GAAP loss of $702 million. In the fourth quarter of last year, the company posted a GAAP profit of $139M on revenue of $7.2B, representing a revenue drop of 37% in the first quarter. 

During the quarter Tesla underwent several restructuring changes, the company reported a $67M charges due to the changes. Tesla reported that demand of the Model S and X fell significantly in the first quarter, largely due to “seasonality”, the reduction in US tax credits, and the discontinuation of the 75kWh battery pack. 

The company revealed for the first time that Model 3 production has moved from customized orders to batch production. This change, which is different than the production of the Model S and X, leaves Tesla with more inventory until the vehicle variants are sold. 

Tesla’s stock was down 2% for the day and is now flat after hours in the moments after Tesla reported earnings. “With the recent rally in the stock price, we see limited upside from here and thus downgrade the rating to Hold,” said.