Today: Tesla dives more than 11 percent after releasing earnings that beat analysts' expectations but didn't excite investors. Also: Some young companies bounce back, but tech still trails.
The Lead: Tesla falls despite staying on a familiar road
Tesla Motors reported earnings Wednesday that beat analyst projections for income and sales while giving hints about increased production capabilities and Chinese demand, a formula that has worked in the past to juice the Palo Alto company's stock. Investors didn't have the same reaction this time, however, sending the electric car maker's stock plunging Thursday.
Tesla stock fell 11.3 percent to $178.59 Thursday, its lowest closing price since early February, after reporting a loss of $49.8 million on sales of $620.5 million in the first three months of the year. After adjustments, Tesla claimed earnings per share of 12 cents on sales of $713 million, better than average expectations of 10 cents a share on revenues of $699 million, according to Thomson Reuters.
Still, those same analysts were unimpressed. As JPMorgan analyst Ryan Brinkman wrote in a note, "while impressive overall and evidencing continued solid progress, (Tesla's results) were only roughly in-line with Street and JPM expectations, and did not reveal significant incremental news flow or feature substantially raised production or delivery guidance."
Translated from analyst to English: Booooooooring. Brinkman made that point even more clearly in the change to his price target: He dropped it a whole dollar, from $164 to $163.
Barclays analyst Brian Johnson was unhappy that Tesla didn't beat expectations in forecasts for current-quarter production of the Model S, the only car model Tesla currently sells. The company said it expects to produce 7,500 cars at its Fremont factory in the second quarter, while analysts projected more than 7,800.
"Whereas investors had grown accustomed to Tesla providing delivery guidance ahead of expectations, the trend was broken" in the current quarter, Johnson wrote, predicting the report would put Tesla stock "in the penalty box in the near term."
Other analysts noted that Tesla stock was probably overpriced for an automotive company after experiencing momentum-driven gains more typical of high-tech companies.
"While Tesla has made significant advances in pioneering electrification for high-end vehicle consumers, the reality is its production, retail and infrastructure obstacles ahead resemble an automotive company rather than a technology company," Stifel analyst James Albertine wrote in a note that predicted shares would settle between $175 and $195.
Not all analysts weighed in on the negative side. Northland Capital Markets analyst Colin Rusch jumped to the defense of Tesla and CEO Elon Musk on questions of the company's elevated spending on a variety of projects, including Model S expansion to new countries, the upcoming Model X, and planned Gigafactories for lithium-ion battery production.
"We believe a primary concern for investors will be about increased spending levels," he wrote. "We believe the essential question for investors to ask is, 'Has Tesla been a good steward of capital?' We believe the answer to that question is a resounding yes."
Tesla was also surprised to learn of an attempt to ban its direct-sales technique in Missouri, similar to a successful push for such a law in New Jersey.
While Tesla had a rough post-earnings ride on Wall Street, Musk's other Silicon Valley cleantech company, San Mateo solar installer SolarCity, enjoyed a big post-earnings gain. After sales more than doubled from the same period a year ago to $63 million, easily beating expectations, SolarCity stock gained 12.4 percent Thursday to $53.60.
SV150 market report: Tech bounces back on Wall Street
Wall Street again showed a distaste for tech stocks again Thursday, though some of the younger companies that have received the most punishment recently bounced back ahead of Thursday afternoon's wave of earnings reports.
In Thursday's earnings action, Symantec announced net income of $217 million, or 31 cents a share, on sales of $1.63 billion, a revenue decline of 7 percent year over year. The Mountain View security software company -- which is looking to change the focus of its core business to challenge younger rivals -- completed its fiscal year with total sales down 3 percent from the prior 12 months at $6.68 billion, and predicted similar sales of $6.63 to $6.77 billion in the current fiscal year. Symantec stock, which closed with a 0.5 percent loss at $20.13, moved to more than $20.50 in late trading. Santa Clara graphics-chips company Nvidia released its full earnings report and discussed it after being forced to announce results a couple of days earlier due to an email snafu. Tuesday's announcement didn't cover Nvidia's forecast, and investors didn't seem to like that part of the report: Nvidia stock dove to less than $18 in after-hours action after closing with a 1.2 percent advance to $18.50. San Jose's Ubiquiti Networks produced record-breaking profits and sales, but shares still dove in late trading, declining to less than $38 after closing with a 1.3 percent gain at $41.37.
Apple dropped 0.2 percent to $587.99 before the Financial Times reported late Thursday afternoon that the Cupertino tech giant is in talks to acquire Beats Electronics for $3.2 billion. Facebook dropped 1.1 percent to $56.76 after a class-action suit against the social network was given the go-ahead by a judge, though separate claims against Facebook and Zynga were dropped; Zynga fell 0.6 percent to $3.54. Twitter bounced back with a 4.2 percent increase to $31.96 despite continued kvetching about the company's financial performance, and Netflix increased 0.4 percent to $321.66 while focusing on documentaries.
Up: SolarCity, Twitter, SanDisk, Applied Materials, Nvidia, LinkedIn, Yelp, Electronic Arts, Adobe, Cisco, VMware, Google, NetApp, Intuit, Netflix, Pandora
Down: Tesla, Splunk, SunPower, Facebook, AMD, Workday, Zynga, eBay, Salesforce, Oracle, Symantec, Yahoo
The SV150 index of Silicon Valley's largest tech companies: Down 2.77, or 0.2 percent, to 1,369.73
The tech-heavy Nasdaq composite index: Down 16.18, or 0.4 percent, to 4,051.5
The blue chip Dow Jones industrial average: Up 32.43, or 0.2 percent, to 16,550.97
And the widely watched Standard & Poor's 500 index: Down 2.58, or 0.14 percent, to 1,875.63