Tesla to report earnings amid stock high

Tesla faces another key test Wednesday as it releases its quarterly report.

Although the stock price has soared and is trading at all-time highs, will earnings and growth match investor expectations?

The electric vehicle maker shipped about 25,000 sedans and SUVs in the first quarter, setting a company record and a 69 percent growth year-over-year.

The Palo Alto company expects to start mass production on the Model 3 sedan this year. The $35,000 electric car is expected to bring Tesla to a broader market of customers, and what the company says about its production and production schedule will be key.

Baird Equity Research senior analyst Ben Kallo wrote last week that he expects the company to continue to focus on producing the Model 3. A range of new Tesla products — including an electric semi-truck, pickup, a smaller SUV and new roadster — could keep investors bullish on the company, he said.

A survey of investors on Robinhood, a fee-free stock trading platform, found retail investors bullish ahead of Tesla’s first-quarter earnings report, but less so than before its fourth-quarter earnings. Robinhood’s users tend to be younger and more tech-savvy than other retail investors.

Tesla is reporting earnings as it deals with controversy.

The company has come under fire from a handful of owners, who claim in a lawsuit that the updated Autopilot driver-assist package is unsafe and delayed beyond the company’s promises.

The company denied the legal claims, saying owners are instructed on the system’s limits and its scheduled rollout.

Also, CEO Elon Musk has drawn criticism for serving on two business advisory panels for President Donald Trump. A San Francisco tech investor started a multimillion-dollar campaign to get Musk to denounce Trump.

Several potential Tesla customers say on the website elondumptrump.com they have cancelled vehicle orders because of the tech entrepreneur’s ties to Trump.

Musk continued to defend his role on the advisory panels, saying he has raised issues of immigration and climate change that might have otherwise been ignored.

The earnings report is scheduled for release after the market closes. Analysts surveyed by Thomson Reuters expect Tesla to post a loss of 82 cents a share on $2.61 billion in revenue.

Photo: An exterior view of Tesla’s Model S beta prototype. (Dai Sugano/Mercury News)


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