Tags: tesla | stock | soars | earnings

Tesla Stock Soars as 2nd Quarter Earnings Defy Expected Loss

Thursday, 08 Aug 2013 07:23 AM

By Clyde Hughes

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Tesla Motors stocks soared in second quarter earnings, ignoring China trademark challenges while surprising analysts who expected the company to report a loss this week.

Tesla reported it earned five cents a share on revenue of $405 million, according to Barron's. Analysts believed the company would report a loss of 17 cents a share on $385 million in revenue.

Tesla made 5,150 deliveries in the quarter while gross margins of 22 percent also came in ahead of forecasts, said Barron's. The magazine said Tesla also touted a 25 percent increase in production, as it made 500 vehicles a week, up from 400.

Year to date, Tesla stock has soared 300 percent, reported USA Today.

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Elon Musk, the company's chief executive officer, has grabbed the auto industry's attention with his focus on on-board computing in Tesla cars and advances in battery technologies, said USA Today. He is also the founder and chairman of SolarCity as well as CEO of SpaceX.

"The automaker's long-term goal of producing a high-volume, low-cost electric car is the next big hurdle, but for now they seem to be firing on all non-existent cylinders," said Kelley Blue Book analyst Karl Brauer.

USA Today said Musk also has ambitious plans for building out Tesla's network of charging stations with plans to expand nationwide by 2015. He also is developing robotic battery-changing prototype stations that could get cars in and out in minutes for about $50.

There are still immediate challenges facing Tesla. Barron's reported Wednesday that the company is battling "trademark trolls" in China, complicating its entry in that market.

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According to Want China Times, "Zhan Baosheng successfully registered the 'Tesla' trademark for land, air, and marine transportation vehicles in 12 categories in 2009. Qiao Weiwei successfully registered 'Tesla Motors' as a trademark in China before selling it to the carmaker on May 6, but the trademark covers only rail vehicle, sleighs, airplanes and ships. It is not applicable to finished car and auto parts."

Because of the trademarks, Chinese authorities have rejected Tesla’s initial application, while Zhan Baosheng turned down Tesla's offer of $326,000 to buy the trademark, Barron's reported.

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