Tesla's Q2 earnings brought bad news mixed with hopeful signs, but markets focused squarely on the former as the company's stock fell sharply after yesterday's report.
Driving the news: Tesla narrowed its net loss to $408 million in the second quarter as the electric carmaker offset lower vehicle margins with cost reductions, and managed to set a record for quarterly deliveries, Axios' Joann Muller reports.
- CEO Elon Musk also announced that co-founder and chief technology officer JB Straubel is stepping down, though he'll remain a "senior adviser."
Why it matters: The results and the latest executive departure appear to be fanning concerns about the company's future, despite the improvement compared to losses a year ago and last quarter.
- The company's stock fell roughly 14% following results that missed analysts’ predictions of an adjusted loss of 35-cents a share — instead losing $1.12 per share.
What they're saying: "The company has never lacked ambition, rather the ability to deliver on it," Oanda analyst Craig Erlam tells Business Insider about the latest "disappointing" report. He adds...
"There's only so long that investors will tolerate it and the reaction to the earnings report says it all."
"I still think there's reasons to be optimistic with the company, but investors need to be very patient or I feel things could unravel quickly for Musk."
Plus, via Bloomberg, Piper Jaffray analyst Alexander Potter said in a note that Straubel is "probably the second-most important person at Tesla." He writes, “[e]ven though he is retaining ‘adviser’ status, his departure is nonetheless likely to rattle investors.”
But, but, but: After a $2.4 billion capital raise, Tesla said it ended the quarter with $5 billion in cash, the biggest sum in its history.
- That liquidity is important as it prepares to launch Model 3 production in China later this year and Model Y production in the U.S. in 2020.
- Tesla said it's aiming to make a profit in the current quarter, but its main focus will be to increase volume, expand capacity and generate cash.
- Musk, on a call with reporters and analysts, said Tesla would be "probably around break-even this quarter and profitable next quarter."