Will Tesla stock post-earnings aftermarket volatility continue?
News of earnings accompanied by forward-looking statements either propel or kill off an uptrend; and Tesla stock has been on a bull wave since October, 2011 with a down blip on news on two key personnel leaving the company.
So, when the news of earnings for Tesla Motors, Inc. (Nasdaq: TSLA) stock hit the public, after-hours trading reacted violently at first, but in favor by taking the stock to greater heights. However, the often fickle after-hours crowd changed their minds, sold off and brought the stock down below its daily close.
Problem is, many traders want to treat Tesla as if it was a mature company like GM or Ford. Fact is , it is not, albeit the engineering achievements make it look like one. So, traders and investors alike must stay focused on important statements contained within the quarterly reports.
In a letter to shareholders, Tesla started by noting they were pleased to report another quarter of solid performance throughout all areas of their company. Most importantly, Model S development and testing remain on schedule so as to commence deliveries by July of this year. As a forward-looking statement, that is a positive.
Last week, the company revealed their new Model X crossover, a unique blend of a minivan, SUV and sports car based upon the Model S platform. That too was considered forward looking, but with a greater sense of physical reality. The response from customers was considered overwhelming, as one day after the reveal, the company had received over 500 reservation requests. Read TN article: Tesla stock sells off early despite news of 2013 Tesla Model X, then recovers
Tesla also announced the start of a development program with Daimler for a new Mercedes-Benz vehicle with a full Tesla powertrain. This represents an increase in the scope and scale of their deepening relationship with Daimler. Again, another positive. Also read: Tesla Model S and Chassis Tech at NAIAS 2012
It was the financial results, though, that drove the stock after-hours. The financial results for Q4 and full year 2011 reflected the continued demand for the Roadster and success in their Powertrain activities. Total revenues in the fourth quarter were $39 million, up 9% from Q4 of last year. Also for the record, the company concluded 2011 with over $204 million in revenues, up 75% from the year before.
Company losses, though, reflected the planned investments in R&D and corporate infrastructure to support the launch of Model S. No surprise there. Their Q4 non-GAAP net loss was $0.69 per share, and $0.78 per share on a GAAP basis. For 2011, the non-GAAP net loss was $2.21 per share, and $2.53 per share on a GAAP basis.
Most important to traders was the news that the Net losses will continue as planned until the company reaches volume sales of Model S in 2013.
Nonetheless, total revenues in Q4 were $39 million, up 9% from Q4 of last year; and full year revenues of $204 million were up 75% from 2010.