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The electric car manufacturer Tesla Motors (TSLA - Free Report) came up with mixed second-quarter earnings results after market close on Wednesday. Though the company’s revenues beat the Zacks Consensus Estimate, loss per share came in wider than our estimate. However, strong year-over-year growth in revenues led shares of Tesla to rise 1% in after hour trading.
Tesla Q2 Earnings in Detail
Adjusted loss per share came in at $1.54, significantly wider than the Zacks Consensus Estimate of a loss of $1.16. However, non-GAAP revenues climbed 30.6% year over year to $1.6 billion and came in above the Zacks Consensus Estimate of $1.5 billion.
The company built 18,345 vehicles in the second quarter, up 18% and 43% sequentially and from the year-ago period respectively. However, it delivered 14,402 new vehicles – 9,764 Model S and 4,638 Model X – earlier than they originally estimated. The company blamed “steep production ramp, which resulted in almost half of Q2 production occurring in the final four weeks of the quarter” for lower-than-expected deliveries (read: It's All About Production: Tesla ETFs to Ride on Q1 Results).
Meanwhile, the company remains on track to deliver about 50,000 Model S and X cars in the first half of 2016. The company expects to increase production volume to 2,200 vehicles a week in ongoing quarter, from second quarter’s rate of 2,000 vehicles a week. It also anticipates production volume in the fourth quarter to increase further to 2,400 vehicles per week.
SolarCity Deal in Focus
Tesla has reached a deal to acquire SolarCity Corporation for $2.6 billion in an all-stock purchase. The figure represents a discount compared to its previous offer to buy SolarCity for $26.50–$28.50 per share. SolarCity stockholders will receive 0.11 Tesla shares for each stock of SCTY that they own (read: Acquisition Talks Boost SolarCity; Hit Tesla: ETFs in Focus).
Tesla hopes that the acquisition will make both companies better off by increasing manufacturing efficiency and lowering customer acquisition costs. Moreover, management thinks that the acquisition of SolarCity “will further our mission of accelerating the world’s transition to sustainable energy.”
ETFs to Watch
Though shares of Tesla increased in after hour trading yesterday, its movement in the coming days will depend on how investors will react to its mixed second-quarter results. Meanwhile, the deal with SolarCity will also have a significant impact on the performance of the company. Against this backdrop, we have selected three ETFs that are having significant exposure to Tesla and are poised to remain on investors’ radar in the coming days.
VanEck Vectors Global Alt Energy ETF
This ETF tracks the Ardour Global Index, focusing on global companies that are primarily engaged in the business of alternative energy. The fund holds about 31 stocks in its basket with AUM of $87 million while charging 62 bps in fees per year. Average daily volume is paltry at less than 5,000 shares. Tesla Motors occupies the third position in the basket with a 9.6% allocation. In terms of country exposure, the fund is skewed toward the U.S. with 49.4% share while China and Denmark round off the top three spots with a double-digit allocation each (see all Alternative Energy ETFs here).
First Trust NASDAQ Clean Edge Green Energy ETF (QCLN - Free Report)
This fund tracks the Nasdaq Clean Edge Green Energy Index and manages assets worth $65.5 million. It charges 60 bps in fees per year while trades in lower volume of around 12,000 shares per day. In total, the product holds 41 U.S. securities in its basket with Tesla Motors taking the second spot at 7.8%. Technology firms dominate this ETF, accounting for more than one-fourth of the assets while industrials and oil & gas round off to the next two spots. QCLN has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Democrats Likely to Win 2016 Election: ETFs to Benefit).
This is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research related to robotics, energy storage, innovative materials, alternative energy sources, infrastructure development, space exploration, autonomous vehicles and 3D printing. This approach results in a basket of 39 securities with TSLA occupying the second spot with 6.8% share. The product has amassed $15.2 million and charges 75 bps in fees per year. It sees a paltry volume of about 1,000 shares a day.
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3 ETFs in Focus on Tesla's Mixed Q2 Results
The electric car manufacturer Tesla Motors (TSLA - Free Report) came up with mixed second-quarter earnings results after market close on Wednesday. Though the company’s revenues beat the Zacks Consensus Estimate, loss per share came in wider than our estimate. However, strong year-over-year growth in revenues led shares of Tesla to rise 1% in after hour trading.
Tesla Q2 Earnings in Detail
Adjusted loss per share came in at $1.54, significantly wider than the Zacks Consensus Estimate of a loss of $1.16. However, non-GAAP revenues climbed 30.6% year over year to $1.6 billion and came in above the Zacks Consensus Estimate of $1.5 billion.
The company built 18,345 vehicles in the second quarter, up 18% and 43% sequentially and from the year-ago period respectively. However, it delivered 14,402 new vehicles – 9,764 Model S and 4,638 Model X – earlier than they originally estimated. The company blamed “steep production ramp, which resulted in almost half of Q2 production occurring in the final four weeks of the quarter” for lower-than-expected deliveries (read: It's All About Production: Tesla ETFs to Ride on Q1 Results).
Meanwhile, the company remains on track to deliver about 50,000 Model S and X cars in the first half of 2016. The company expects to increase production volume to 2,200 vehicles a week in ongoing quarter, from second quarter’s rate of 2,000 vehicles a week. It also anticipates production volume in the fourth quarter to increase further to 2,400 vehicles per week.
SolarCity Deal in Focus
Tesla has reached a deal to acquire SolarCity Corporation for $2.6 billion in an all-stock purchase. The figure represents a discount compared to its previous offer to buy SolarCity for $26.50–$28.50 per share. SolarCity stockholders will receive 0.11 Tesla shares for each stock of SCTY that they own (read: Acquisition Talks Boost SolarCity; Hit Tesla: ETFs in Focus).
Tesla hopes that the acquisition will make both companies better off by increasing manufacturing efficiency and lowering customer acquisition costs. Moreover, management thinks that the acquisition of SolarCity “will further our mission of accelerating the world’s transition to sustainable energy.”
ETFs to Watch
Though shares of Tesla increased in after hour trading yesterday, its movement in the coming days will depend on how investors will react to its mixed second-quarter results. Meanwhile, the deal with SolarCity will also have a significant impact on the performance of the company. Against this backdrop, we have selected three ETFs that are having significant exposure to Tesla and are poised to remain on investors’ radar in the coming days.
VanEck Vectors Global Alt Energy ETF
This ETF tracks the Ardour Global Index, focusing on global companies that are primarily engaged in the business of alternative energy. The fund holds about 31 stocks in its basket with AUM of $87 million while charging 62 bps in fees per year. Average daily volume is paltry at less than 5,000 shares. Tesla Motors occupies the third position in the basket with a 9.6% allocation. In terms of country exposure, the fund is skewed toward the U.S. with 49.4% share while China and Denmark round off the top three spots with a double-digit allocation each (see all Alternative Energy ETFs here).
First Trust NASDAQ Clean Edge Green Energy ETF (QCLN - Free Report)
This fund tracks the Nasdaq Clean Edge Green Energy Index and manages assets worth $65.5 million. It charges 60 bps in fees per year while trades in lower volume of around 12,000 shares per day. In total, the product holds 41 U.S. securities in its basket with Tesla Motors taking the second spot at 7.8%. Technology firms dominate this ETF, accounting for more than one-fourth of the assets while industrials and oil & gas round off to the next two spots. QCLN has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Democrats Likely to Win 2016 Election: ETFs to Benefit).
ARK Industrial Innovation ETF (ARKQ - Free Report)
This is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research related to robotics, energy storage, innovative materials, alternative energy sources, infrastructure development, space exploration, autonomous vehicles and 3D printing. This approach results in a basket of 39 securities with TSLA occupying the second spot with 6.8% share. The product has amassed $15.2 million and charges 75 bps in fees per year. It sees a paltry volume of about 1,000 shares a day.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>