Electric car-maker Tesla Motors (TSLA – Analyst Report) dampened investors' mood following its second-quarter results after the closing bell on Wednesday. While earnings and revenues came in better than our estimates, disappointing guidance for full-year deliveries swept away the positive sentiments, sending the stock in deep red in aftermarket trading. Tesla dropped as much as 6.7% in aftermarket hours on elevated volume.
Tesla Q2 Earnings in Focus
Adjusted loss per share came in at 82 cents in the quarter, narrower than the Zacks Consensus Estimate of a loss of $1.39. Revenues climbed 40% year over year to $1.2 billion and were well ahead of the Zacks Consensus Estimate of $1.16 billion.
The company built 12,807 vehicles in Q2 exceeding its own expectation of 12,500, and delivered a record 11,532 new cars, up 52% from the year-ago quarter and above its target of 11,507. It expects to produce over 12,000 cars, up 60% year over year, and deliver the same number of vehicles in the ongoing quarter. For 2015, Tesla now expects to deliver 50,000 55,000 Model S sedans and Model X SUVs, down from the previous guidance of 55,000 vehicles (read:Auto Sales on Top Gear: ETFs & Stocks to Ride on).
Model X SUV is on track for its first delivery in September. Next year, Tesla Motors CEO, Elon Musk, seems confident of steady production and demand for 1,600 to 1,800 vehicles per week together for Model S and Model X. Additionally, the company is in the process of revealing the design of its new car – the Model 3 sedan – with first delivery expected in late 2017.
ETFs to Watch
Given the Q2 beat and disappointing delivery guidance, some ETFs having substantial allocation to this luxury car-maker will be in focus in the coming days. The sluggish trading in Tesla could point to an attractive opportunity given that the company currently has a Zacks Rank #2 (Buy) and a solid Zacks Industry rank in the top 6%.
As a result, investors should closely monitor the movement in these ETFs and grab opportunities from a rising stock price or avoid them if the stock drags them down.
Market Vectors Global Alternative Energy ETF ((GEX – ETF report))
This ETF tracks the Ardour Global Index, focusing on global companies that are primarily engaged in the business of alternative energy. The fund holds about 31 stocks in its basket with AUM of $92.3 million while charging 62 bps in fees per year. Average daily volume is paltry at under 7,000 shares. Tesla Motors occupies the top position in the basket with 11% allocation. In terms of country exposure, the fund is skewed toward the u.s. with 59.5% share while China and Denmark round off the top three spots with over 10% allocation each. The ETF has added about 9.7% so far in the year (read: Protect Your Environment with These ETFs).
