Tesla booked higher than expected revenues and lower than expected operating losses for the first quarter of the year, leaving analysts confused again as to the future of the company.
At US$2.75 billion, Tesla’s automotive revenues were 27.4 percent higher on the year, which was a record high in the revenue department, while operating losses, at US$3.35 per share, were lower than the US$3.48 loss per share analysts had expected. Net loss, however, came in at a record US$785 million, with the company projecting it will move into the black in the third and fourth quarter of the year.
Cash fell from US$3.4 billion in January 2018 to US$2.7 billion in March, but Elon Musk told analysts during the conference call on the earnings statement that the company would not need to raise more funding this year, which baffled a lot of those present.
Tesla will be cutting its budget for the year to US$3 billion from US$3.4 billion with the focus of all its efforts continuing to be the ramp up of production of the Model 3, which reached 2,270 in the third week of April, with production consistently exceeding 2,000 cars for each of the first three weeks of last month.
This is less than half of what Tesla needs to be producing for it to become profitable. Despite assurances from Musk and CFO Deepak Ahuja that the ramp-up will happen in the second quarter, analysts are right to remain skeptical. This is by far not the first assurance that Tesla has given that it will hit its targets after strings of delays.
Still, the carnage many expected to be revealed at the first-quarter conference call did not come to pass, which should provide Tesla bulls with some hope. The company will be shutting down its Fremont factory again to ensure the Model 3 ramp-up and expects the 5,000 milestone to be reached by the end of June, generally in line with its earlier update on this most precious of all targets that was to be hit some time in the second quarter.
By Irina Slav for Safehaven.com
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