After the closing bell on Wednesday, Tesla Motors (TSLA – Free Report) reported disappointing results for the third quarter of 2017. The electric carmaker reported the biggest loss ever in its history, missing our earnings estimate despite better-than-expected revenue numbers. It also failed to live up to the Model 3 production goal in the quarter, reflecting production issues.
Tesla Q3 in Focus
Adjusted loss per share came in at $2.92, much wider than the Zacks Consensus Estimate of a loss of $2.45 and the year-ago loss of $1.33 per share. Revenues climbed 30% to $2.98 billion and edged past the Zacks Consensus Estimate of $2.92 billion.
Tesla delivered 26,137 vehicles (25,915 Model S and Model X combined, and 222 Model 3) during Q3, up 4.5% from the year-ago quarter. While Model S and Model X deliveries hit a record, the company missed the Model 3 production target of 1,500 vehicles due to the “production bottlenecks”. As such, the automaker pushed back the Model 3 production target of 5,000 vehicles per week to the first quarter of 2018 from the end of 2017.
However, the company is on track to deliver about 100,000 Model S and Model X this year, reflecting an increase of 30% from last year.
ETFs to Watch
Given the Q2 earnings miss and Model 3 production delays, shares of Tesla tanked as much as 5.4% in aftermarket hours on elevated volume. The rough trading is likely to continue in the ETF world for funds having substantial allocation to this luxury carmaker. Tesla currently has a Zacks Rank #5 (Strong Sell) and a VGM Style Score of F.
As a result, investors should closely monitor the movement in these ETFs and grab opportunities from the rising stock price or avoid them if the stock drags them down.
VanEck Vectors Global Alternative Energy ETF (GEX – Free Report)
This ETF tracks the Ardour Global Index Extra Liquid, 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 $86.5 million while charging 62 bps in fees per year. Average daily volume is paltry at about 5,000 shares. Tesla occupies the third position in the basket with 9.5% allocation. In terms of country exposure, the fund is skewed toward the United States with 57.2% share, while Denmark and China round off the top three spots.
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