Facebook and Tesla report quarterly earnings
Tesla had $2.2 billion in cash at the end of the first quarter. That's a lot, but it's $1.5 billion less than it had at the end of 2018.
Most of that cash went to a debt payment that came due. But Tesla also said it had to burn through cash as it struggled to get cars to customers.
Tesla (TSLA) generates most of its cash from luxury car sales, including the Model S and the Model X. But sales of those cars are declining: Deliveries were down 45% from a year ago. The company makes far less money on the way more popular Model 3.
But Tesla said on a conference call with analysts that it is confident it will grow its cash hoard from here on out. It said last quarter's losses were mostly one-time events.
Tesla's (TSLA) first quarter was bad. But the company is still growing strong, and Wall Street thinks last quarter could have been a lot worse.
Total revenue: $4.5 billion, down 37% from the fourth quarter and up 33% from a year ago.
Car sales: $3.7 billion, down 41% from the fourth quarter and up 36% from a year ago.
Net loss: $702 million, swinging from a $139 million profit in the fourth quarter and flat compared to a year ago.
Model 3 deliveries: 50,928, down 20% from the fourth quarter and up 522% from a year ago.
Model S & Model X deliveries: 12,091, down 56% from the fourth quarter and down 45% from a year ago.
Outlook: Tesla reaffirmed its guidance of producing up to 400,000 cars this year.
Stock: Analysts expected a bloodbath, and it got one. Tesla's stock (TSLA) was up about 1% in after-hours trading.
Tesla reported earnings about 45 minutes after they were expected. And they were dreadful.
The company posted a $702 million dollar loss in the first quarter on just $4.5 billion in revenue. Last quarter, Tesla recorded a profit of $139 million on sales of $7.2 billion. A year ago, Tesla lost $710 million on $3.4 billion in revenue.
Tesla (TSLA) blamed a number of factors, including an international expansion, production issues and a large number of customers eager to get their tax credits by the end of 2018. But slowing demand for electric cars was also a factor.
Facebook (FB) just confirmed that it's expecting an unprecedented fine from the Federal Trade Commission that could total as much as $5 billion. So naturally investors reacted by the sending the stock up as much as 5% in after hours trading.
The stock move may be a sign investors feel relief that Facebook is close to putting the FTC investigation behind it — and that the settlement isn't even worse.
Popular payments app Venmo has more than 40 million users, its parent company PayPal (PYPL) said on Wednesday.
This is the first time the company has disclosed how many people use the app, which is especially popular with millennials, who use it to send money to friends for things like groceries and rent.
During PayPal's first quarter, Venmo processed $21 billion in total payment volume, which represented growth of 73%. PayPal acquired Venmo in 2013.
Tesla (TSLA) doesn't exactly do "early," but this is a little nuts.
The market has been closed for 50 minutes, and investors (and reporters, ahem) are still eagerly pressing F5 on Tesla's website.
Wall Street has been bracing for what one analyst called “apocalyptic” results. Analysts surveyed by Refinitiv predicted that Tesla would be about $301 million in the red for the quarter.
The wait isn't helping ease fears.
Facebook's revenue for the first three months of 2019 topped $15 billion, a 26% increase from the year prior, despite an endless list of scandals. But the company's profit took a hit as it set aside $3 billion for an ongoing FTC investigation into its data privacy practices.
Facebook reported a profit of $2.4 billion for the quarter, down 51% from the year prior. That marks the company's first year-over-year profit decline since 2015.
Facebook (FB) estimates it will need $3 billion to $5 billion to cover an expected fine from the Federal Trade Commission, the company said in its first quarter earnings report on Wednesday. The company previously confirmed it has been in talks with the FTC, following a report that the agency may levy a record fine against the company for violating an 2011 data privacy agreement.
In its statement accompanying its earnings, Facebook said,
"The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome."
The company said that the funds it set aside for legal expenses related to the investigation cut into its profit for the first three months of 2019. Its earnings of $2.4 billion were down 51% from the same period a year ago.
Microsoft's (MSFT) bet on the cloud continues to pay off.
On Wednesday, the company said sales for its most recent quarter rose 14% to $30.6 billion, which was above Wall Street's estimates. The increase in revenue was helped by the company's commercial cloud business, which jumped 41% to $9.6 billion from last year.
Earnings-per-share also beat analysts' expectations. The stock rose more than 2% in after-hours trading.
The company has heavily invested in cloud services in the last several years, shifting focus away from its legacy business, Windows.
Microsoft's efforts have placed the company near the top of the fast-growing cloud technology sector. Its key cloud-computing platform is Azure, which competes with Amazon Web Services (AWS).