Tesla Motors (TSLA) Hit On Wider Loss & Technically Broken, But Reasons For Optimism Remain; Bigger Toyota Deal Coming?

Not sure how I missed this report last night, but Tesla Motors (TSLA) reported its earnings with a wider loss than expected.  Analysts were predicting a big loss from Tesla as the company continues to pour big bucks into R&D ahead of the launch of the Model S next year, but the company reported a bit wider loss of .53/share vs the estimate for .51/share.  This despite a big bump in revenues to $58 million which is double the year ago quarter.  Considering the surprise jump in revenue, traders weren’t kind today, punishing the stock for the earnings miss. The high volume move today breached key support at the 200 day moving average which renders the stock technically broken at this time.  Certainly the action in the overall market helped push the stock lower, but a technical breach is a technical breach and shares of Tesla should be avoided at this time.

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There is some positive news to report.   The company did raise guidance just a bit from $170 – $185 million to $180 – $190 and reiterated plans to launch the Model S in mid 2012.  The company said it has also started development on the Model X which it predicts could be on the road by the end of of 2013.

Elon Musk didn’t waste any time on the conference call highlighting the positive points including hinting that a much larger Toyota deal was in the works.

“Thanks, Jeff. If you’ve been listening in on the calls on prior quarters, you’ve usually been pretty circumspect in our turn about the quarter results, but in this case I think that that just won’t be accurate. This was the best quarter in Tesla’s history. It was just phenomenal across the board and we saw a tremendous demand for Roadster, for Model S, well over 5,000 products, almost all of next year’s production of Model S.

And we’ve also signed the $100 million deal with Toyota. We’re actually in discussions with them for a deal that is in order of 90 or larger than that. The retail strategy is going gangbusters, two new stores that have a new approach. The stores have had 200,000 visitors in its opening. Yes, it’s been tremendous across the board and with looks great momentum going into the third quarter.”

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