Investors seem pleased with Tesla Motors’ (TSLA) numbers, even if the third quarter looked “wobbly,” in the words of Goldman Sachs analyst Patrick Archambault and team say. They explain what’s going on:
Bloomberg News 3Q was a difficult quarter with deliveries, gross margins, and 4Q guidance all below expectations driving us to lower our 2014 EPS forecast to $0.54 from $0.86, previously. We were also a bit surprised by commentary that seemed to de-emphasize the importance of China in 2015. On the positive side management was plainspoken in its expectation for Model S orders and deliveries to be up 50% in 2015 (even with a diminished China delivery outlook), and moved forward expected initial Gigafactory cell production timing to 2016. With this leaving the longer-term growth story broadly intact we don't expect out year profit expectations to change much (as was the case with our forecasts), which perhaps explains the stock being up in after-hours trading despite the quite wobbly 3Q14 result.
Shares of Tesla Motors have gained 3.7% to $239.50 at 9:47 a.m. today.
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