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 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 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 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, suggest there may be trouble in Tesla's future too. In a note to employees, posted on Tesla's website, 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.