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Tesla reports third-quarter loss; promises 'hundreds' of Model X SUVs soon

Tesla Motors reported a loss of $230 million, or $1.78 per share, in releasing its third-quarter earnings report at close of market Tuesday.

The Palo Alto electric-car company reported total revenue of $937 million -- above Wall Street expectations, but a drop from second-quarter revenue of $955 million.

That compares to third-quarter revenue of $852 million during 2014.

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Tesla stock closed down 5.4% at $208.35 but surged to as high as $231 per share in after-market action.

The company had $392 million in capital outlay, largely the result of factory expansion to accommodate the new Model X production line in Fremont, Calif., and investment in its massive battery factory near Sparks, Nev.

The company's third-quarter income included a reported $39 million in sales of government-awarded zero-emissions vehicle credits as well as $33 million in sales of pre-owned cars.

Tesla has sold almost $600 million in zero-emissions credits over its life. It earlier had said it expected to sell $45 million in credits in the third quarter.

But the report said that Tesla does not expect to sell any zero emissions credits in the fourth quarter.

The earnings report caps a busy period for the company. Stock prices have bounced considerably in the second half of the year, falling from a high of $282 in July to a low of $206 in October.

The company lost a coveted recommendation for its Model S from Consumer Reports after owners complained of persistent quality problems, only weeks after its top-of-the-line P85D sedan earned the magazine's top road test scores.

Tesla grabbed headlines a short time later by trumpeting a new software suite, downloadable by owners, that included substantial autonomous driving features.

The company and co-founder Elon Musk have had credibility problems for some time, largely because of the multiple delivery delays of its "falcon-wing" crossover Model X and the planned Model 3, a more affordable all-electric sedan now due in 2017.

Many investors and analysts believe the company's ultimate success will depend on that more affordable model, and its current stock price reflects that expectation.

The company said Tuesday that it planned to build 15,000 to 17,000 vehicles and deliver 17,000 to 19,000 in the fourth quarter, for a total of 50,000 to 52,000 deliveries for the year -- though it did not report how many of those deliveries would be of the new Model X.

The automaker recently announced the arrival of the SUV, but initially delivered only six vehicles. Chief Executive Musk, in a call with investors, said the company now expects to manufacture "several hundred" Model Xs by the end of the year.

Tesla said supplier problems and quality control had slowed production of the falcon-wing crossover, particularly problems with the car's second-row seats.

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"These factors add uncertainty to our build plans" during the fourth quarter, the company said. "But we feel emphasizing quality is the right decision for our customers."

The report said it expected to produce Model X vehicles in the first quarter of 2016 at a rate of 1,600 to 1,800 vehicles per week -- a prediction that would pencil out at 88,000 vehicles for the coming year.

Tesla had earlier forecast 2015 deliveries of 55,000, but it is likely to miss that target.

In reaction to the news, Kelley Blue Book anaylst Karl Brauer said investors should be feeling "less nervous" about production and delivery rates.

"There’s still the near-term issue of Model X production and Model 3 launch timing, both of which need to remain on schedule for Tesla to keep growing sales," Brauer said. "But for now the company’s third-quarter numbers appear close enough to keep Wall Street happy."

Tesla also announced a replacement for Deepak Ahuja, the outgoing chief financial officer. He will be replaced by Jason Wheeler, a Google Inc. veteran.

Twitter: @misterfleming


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