Tesla's biggest net loss helps meet production target

Tesla's biggest net loss helps meet production target

Just as importantly for investors, he's acting more like a real CEO.

Tesla ended the second quarter with $2.78 billion in cash after spending $610 million in capital expenses.

In the previous quarter, Musk called questions posed by two analysts "boring" and "boneheaded", and refused to answer them.

Bulls are betting the results and the contrition mark a turning point both for Tesla and its chief executive officer.

"After three quarters where investors have been in the dark with respect to estimating Model 3 volumes and margins, Q2 felt like there might finally be some light at the end of the tunnel", Evercore analysts wrote. The call triggered a stock sell-off and raised questions about Musk's behaviour. "His actions on the call were a powerful statement that he's capable of channeling his energy for the good of the company, and it removes a central concern of Tesla supporters".

Telsa's shares jumped 9.3 per cent to $US328.85 in after-hours trading.

It comes after Musk announced classic Atari games would be coming to Tesla's V9.0 software release in four weeks. Analysts polled by FactSet expected a $US2.88 loss per share.

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Free cash flow, a key metric of financial health, narrowed to negative $740 million in the second quarter from negative $1 billion in the first quarter, excluding solar business costs.

The company's revenue grew for the sixth straight quarter, mainly thanks to sales of the Model 3. "I'm more concerned about quality issues and service issues", Kudla said. "Perhaps it reflects a more cautious Elon Musk". That's substantially less than the 2017 level of $3.4 billion. But analysts suggest that Tesla might run out of cash if it doesn't do a bigger capital raise.

"We like the more muted tone of the company's outlook, with the absence of unnecessary new stretch goals", said CFRA analyst Efraim Levy.

Tesla ended June with about $2.2 billion in cash, the least it's carried since the first quarter of 2016.

Musk, the eccentric billionaire, has been a lightning rod for controversies. Tesla says it's on track to produce 100,000 Model S and X cars this year.

Tesla spent millions as it reached a goal of producing 5000 Model 3 sedans per week by the end of June. He also said that production efficiencies should rise as more Model 3s are built, and he said that he expects to make to around 750,000 vehicles in calendar year 2020. Tesla is renewing the target even as Musk and Ahuja tout having "significantly cut back" on spending projections. That said, Tesla is making headway too.

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