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Tesla stock falls on wider loss, CEO comments on cash need
[DETROIT] Shares of Tesla Motors Inc fell about six per cent on Wednesday after the electric car maker posted a wider quarterly loss and said it may raise more cash to offset heavy spending on expanded production.
A recently negotiated credit line can be extended from US$500 million to US$750 million and should be enough to cover planned investments in California and Nevada factories, chief financial officer Deepak Ahuja told analysts on a conference call.
But "there may be some value" in raising additional funds for "risk reduction," chief executive Elon Musk added. He declined to elaborate.
Tesla may not be cash-flow positive until early 2016, Mr Ahuja said. Mr Musk's previous estimate was the end of this year.
Tesla's new storage battery business could generate revenue of US$400 million to US$500 million in 2016, and "a few billion dollars" in 2017, Mr Musk said on Wednesday.
Tesla lowered its full-year sales forecast to a range of 50,000 to 55,000 cars. Last year, Mr Musk had forecast sales of 60,000 cars in 2015, but cut that earlier this year to 55,000. He forecast vehicle sales next year of 83,000 to 93,000.
Tesla's stock fell to US$254 in extended trading, after closing up 1.4 per cent at US$270.13. It has swung widely over the past 12 months, from a low of US$181.40 to a high of US$291.42.
The company said it lost US$184.2 million in the second quarter, compared with a loss of US$61.9 million in the year-ago period. Revenue climbed 24 per cent to US$955.0 million, from US$769.3 million, as car sales continued to rise.
On an adjusted basis, Tesla said it lost 48 US cents a share, less than the 60 US cents analysts had expected. In the year-earlier period, Tesla said, it earned 13 US cents a share on an adjusted basis.
With expenses still outstripping revenue, Tesla's cash reserves fell to US$1.15 billion as of June 30, from US$1.5 billion on March 31 and US$1.9 billion on Dec 31, bringing total cash burn in the first half to US$755.0 million.
Earlier this year, Mr Ahuja said total cash burn for the year should be less than US$1.0 billion.
Capital expenses totaled US$405.2 million, as the company continued to spend to complete tooling on the crossover Model X and equip the new Nevada battery factory, which is slated to open in 2016. Spending in the first half totaled US$831.2 million. Tesla said it expects full-year capital expenditures of about US$1.5 billion.
Free cash flow fell slightly to US$564.7 million. The cash burn in the second quarter was partially offset by US$218.4 million in cash from financing activities.