Tesla Shares Sink After Musk Teases a Difficult Quarter Ahead
*By Chloe Aiello*
Tesla shares sank in extended trading on Wednesday after reporting mixed results on earnings and revenue, and teasing a turbulent quarter ahead.
CEO Elon Musk [also announced at the close of Tesla's call with analysts](https://www.cnbc.com/2019/01/30/musk-says-tesla-cfo-deepak-ahuja-is-leaving-the-company.html) that longtime CFO Deepak Ahuja will retire from the company. He's just the latest high level employee to depart amid tumult at the automaker.
The electric carmaker reported earnings per share of $1.93 cents on revenue of $7.23 billion, just missing expectations on earnings, but beating on revenue. Analysts surveyed by Thomson Reuters anticipated earnings of $2.20 per share on $7.08 billion in revenue.
Tesla ($TSLA) still managed to bump its earnings per share and revenue significantly from last year, when it reported a $3.04 loss per share on $3.29 billion in revenue.
Tesla attributed its earnings miss to higher import duties on components from China combined with revenue lost from sales of regulatory credits, lower prices on Model S and Model X vehicles in China, and the lower price of the new Model 3.
For this year, the automaker [said in its financial report](http://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0) it expects production volume of its ever-important Model 3 to gradually grow through 2019 until it reaches "a sustained rate of 7,000 units per week at the end of the year." Tesla is targeting an annual Model 3 output of 500,000 units between its factory in Fremont and Gigafactory in Shanghai and expects to deliver 360,000 to 400,000 vehicles in 2019.
Tesla also acknowledged the federal electric vehicle tax credit cut ー [halved to $3,750 on Jan. 1](https://cheddar.com/videos/tesla-shares-tumble-as-miss-on-car-deliveries-spooks-investors) ー could impact Model S and Model X deliveries in the current quarter.
The quarter closes a difficult year in Tesla's history, during which CEO and former chairman Elon Musk staggered under the pressure of keeping the company above water and meeting self-imposed production deadlines on the Model 3 sedan. Repercussions from Musk's erratic behavior last year still reverberate within the company, which is under a Justice Department investigation concerning Musk's tweets in August about taking the company private.
Tesla's layoffs in mid-January, [which cut its headcount by a full 7 percent](https://www.cnbc.com/2019/01/18/tesla-to-cut-its-workforce-by-around-7-percent.html), suggest there may be trouble in Tesla's future too. [In a note to employees, posted on Tesla's website](https://www.tesla.com/blog/tesla-company-update?redirect=no), Musk said "the road ahead is very difficult" as Tesla works to sell affordable, sustainable products.
"Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months," Musk wrote.
The layoffs, which Tesla said will require a one-time restructuring cost, will figure into the current quarter's financials. Tesla estimates they will ultimately save the company about $400 million annually.
Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion. The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
