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Digging Deeper into Tesla’s Q1 2019 Earnings Miss

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Apr. 25 2019, Published 7:10 a.m. ET

Tesla’s first-quarter earnings

Popular electric carmaker Tesla (TSLA) released its first-quarter earnings results on April 24 after the market closed. The company reported adjusted net EPS of -$2.90 in the first quarter of 2019, much worse than its adjusted net EPS of $1.93 in the previous quarter.

In the first quarter of 2018, Tesla’s adjusted net EPS were much lower at -$3.35.

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According to Thomson Reuters, Wall Street analysts were expecting Tesla to report adjusted net EPS of -$0.69 in the quarter. Let’s take a quick look at how investors reacted to Tesla’s first-quarter earnings report before we dig deeper into its financials.

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Weakness in Tesla stock

On April 24, before Tesla announced its first-quarter results, its stock settled at a 2.0% loss for the day. After the announcement, the stock traded on a mixed note and marginally extended these losses by 0.1% in the after-hours trading session.

The company’s worse-than-expected first-quarter losses, the sequential fall in its automotive revenue, and its dismal gross margin could be some of the main reasons for investors’ pessimism.

As of April 24, Tesla stock had fallen 22.3% YTD (year-to-date) compared to the 16.8% and 22.1% gains seen in the S&P 500 Index and the NASDAQ Composite Index, respectively. In 2019 so far, some large automakers have outperformed the broader market. As of the end of the day on April 24, General Motors (GM), Ford Motor Company (F), and Ferrari (RACE) were trading with 18.7%, 25.1%, and 37.2% YTD gains, respectively. Fiat Chrysler Automobiles (FCAU), Toyota Motor (TM), and Honda Motor Company (HMC) have risen 6.8%, 5.9%, and 4.7%, respectively, in 2019 so far.

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