The lead: Tesla shares add to record after first profitable quarter beats expectations
Tesla CEO Elon Musk had already let the world know that his Palo Alto electric car company would post its first profitable quarter after a decade of existence, but the company's earnings report still showed better numbers than outsiders expected Wednesday, and shares catapulted from already-record-high levels in late trading.
Tesla reported profits of 12 cents per share, quadruple average analyst estimates of 3 cents a share, on revenues of $562 million, also exceeding expectations. Tesla also said that it would not only meet its previous estimate of selling 20,000 Model S sedans this year, but increased that forecast to 21,000, one of the keys for the growing company.
"2013 is off to a strong start." Musk and Chief Financial Officer Deepak Ahuja wrote in a letter to shareholders, adding "Increasing production by over 3000 percent from Roadster to Model S was extremely difficult and many mistakes were made, but now we are starting to get the hang of things."
Good news was sprinkled throughout the earnings report, with Tesla reporting sales of 4,900 Model S sedans -- better than the 4,750 it said it would report in April -- and a decline in research and development expenses as production volume increased at its Fremont factory, the former home of NUMMI. Overseas demand for the car has been a big driver of sales, with Musk saying in Wednesday's conference call that he expects 10,000 cars to be sold in Europe and about 5,000 in Asia.
While prospective competitors such as the bankrupt Coda and seemingly-bankrupt-any-day-now Fisker fall by the wayside, Tesla continues to move along nicely, with plans for the company's next all-electric vehicle forming. The Model X, a larger model similar to a minivan or SUV, should begin production in late 2014, the company said Wednesday.
"Tesla is laying a foundation to be a volume automaker," Dougherty analyst Andrea James told Mercury News reporter Dana Hull. "The story has now advanced to the beyond-2014 horizon."
Tesla shares have already been comfortably trading at all-time highs amid Musk's announcements of a new leasing program, warranty guarantees and a high-profile speech to Tesla fans at a MacWorld-style conference, all in the shadow of his very public spat with The New York Times. After Wednesday's announcement, however, those records could be left in the dust -- Tesla stock shot up more than 25 percent to around $70 in after-hours trading, following a regular session that saw share close with a 0.5 percent advance at $55.79. Tesla's all-time intraday high is $62.37, which it hit Tuesday.
SV150 market report: EA shoots higher, Symantec heads the other way
In regular trading, the Dow Jones and Standard & Poor's 500 again established new all-time closing highs -- the fifth straight day the S&P did so -- with tech stocks pushing the S&P to a 0.4 percent gain and the Nasdaq to a 0.5 percent increase. The SV150 easily outperformed its larger siblings with a 1 percent gain.
Redwood City's Electronic Arts was a big part of that increase, as the video game company's shares hit 52-week intraday and closing highs Wednesday. EA's Tuesday earnings report included a strong forecast for 2014, changing the conversation from poor past performance that ushered the CEO out and led to layoffs and pushing shares as high as $21.68 before they closed at $21.56, a daily gain of 17.1 percent.
Silicon Valley's other major Tuesday earnings report led to Symantec stock heading the other way. The Mountain View security software company's forecast was lighter than expected as it plans for difficulties from Japanese currency issues. Symantec shares dipped as low as $23.54 but recovered slightly to close with a 2.4 percent dip at $24.49.
Yahoo (YHOO) established a new closing high but couldn't touch Tuesday's top intraday price as it continued a stupendous Wall Street turnaround that has its stock prices at levels unseen since the end of the merger drama with Microsoft in 2008. There seems to be new drama between Yahoo and Microsoft, however, as the extension of the companies' search deal Tuesday was followed by reports that CEO Marissa Mayer is looking to wiggle out of the deal to strike up a partnership with her former employer, Google (GOOG). Yahoo gained 1.3 percent on the day to close at $26.41.
Silicon Valley's large-cap stocks enjoyed a strong day: Apple (AAPL) continued its recent renaissance with a 1.1 percent gain to $463.84, good news for its high-paid chief financial officer; Google continued to establish new intraday and closing highs, advancing 1.9 percent to $873.63 as judges seemed to side with the search giant in its effort to offer digitized versions of the world's books; Hewlett-Packard (HPQ) gained 2.8 percent to $21.07 despite yet another shareholder lawsuit related to the Autonomy debacle; and Cisco (CSCO) increased 1.7 percent to $20.72 despite a challenge from Facebook.
Facebook gained 0.9 percent to $27.12 after a big partnership with Target was announced, but the phone that launched with great fanfare from Facebook thanks to its Home app may not be selling so well: The HTC First price was dropped from $99 to 99 cents. San Francisco real-estate website Trulia suffered a big drop of 7.8 percent to $31.68 after announcing the pricey acquisition of customer relationship management firm Market Leader. Milpitas flash memory maker SanDisk dropped 0.3 percent to $55.24 despite boastful words about the industry from its CEO.
Up: EA. Advanced Micro Devices, Zynga, Juniper, Hewlett-Packard, SolarCity, Google, eBay (EBAY), Nvidia, Cisco, Yahoo, Netflix (NFLX), Apple, Workday, Applied Materials, Facebook, NetApp, Oracle (ORCL), VMware, Tesla, Intel
The SV150 index of Silicon Valley's largest tech companies: Up 12.85, or 1.03 percent, to 1263.26
The tech-heavy Nasdaq composite index: Up 16.64, or 0.49 percent, to 3,413.27
The blue chip Dow Jones industrial average: Up 48.92, or 0.32 percent, to 15,105.12
And the widely watched Standard & Poor's 500 index: Up 6.73, or 0.41 percent, to 1,632.69
Also in the news: Microsoft gets a new CFO, Enron CEO's sentence to be cut
Microsoft appoints first female CFO: Microsoft appointed Office executive Amy Hood to be the company's new chief financial officer, replacing Peter Klein, who said he was leaving when the company reported earnings last month. ... Enron CEO expected to be released up to a decade early: Court papers showed Wednesday that the government has agreed to support a reduced sentence for Enron CEO Jeffrey Skilling. ... Groupon shares gain after earnings: Groupon's North American business showed improvement in the first quarterly report since CEO Andrew Mason departed.
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.