Tesla’s Earnings Disaster

Just when it looked as if Tesla Inc. (NASDAQ:TSLA) was getting its act together, a big earnings miss sent shares plummeting late Wednesday.

Tesla dropped double-digits last night after the company missed top and bottom line expectations. While the company barely came up short on revenue, it reported a loss of $1.12 per share during the second quarter. Analysts were expecting the car manufacturer to lose just 40 cents per share.

Investors weren’t exactly happy with these results.

I can’t blame them. After all, CEO Elon Musk said Tesla would be profitable “in Q1 and all quarters going forward” during the company’s fourth-quarter earnings call back in January. Just as Tesla posted its first consecutive quarterly profits, Elon was already writing checks with his mouth that his electric car company can’t cash.

We’ll have to wait and see if any buyers step in to scoop up Tesla shares following its earnings flop. But as of right now, it’s safe to say that the stock’s comeback rally is officially in jeopardy.

TSLA

Tesla wasn’t the only controversial company reporting earnings last night.

Facebook Inc. (NASDAQ:FB) revealed last night that the FTC has opened an antitrust investigation involving the social media giant (that’s presumably on top of the Justice Department investigation we learned about earlier this week).

Do investors care?

Nope. That’s because Facebook also reported that it beat top and bottom line expectations. The stock spiked toward all-time highs in extended trade Wednesday. It will open near $210.

FB

Facebook’s data breach, the election tampering scandal, and the $5 billion FTC fine can’t stand in the way of this incredible comeback run. Zuckerberg wins…again.

Meanwhile, Coca-Cola Co. (NYSE:KO) is proving it knows more than just soda.

As soda sales drop and sugar free drinks take over, Coca-Cola managed to have a strong second quarter, beating estimates and streaking to new all-time highs.

Coke’s earnings beat is partly due to its diverse lineup of drinks, according to Business Insider. Offerings like Coke Zero Sugar and Costa Coffee drinks served overseas show that Coca-Cola can adapt with changing customer preferences — even as traditional soda sales dwindle.

Shares jumped more than 5% Tuesday morning following the earnings beat. The stock is now consolidating just below its highs. Shares are now up 15% year-to-date as the stock attempts to keep pace with its fellow blue chips in the Dow.

KO

While “healthier” drinks are certainly helping Coca-Cola, Stranger Things tie-ins with the re-release of the infamous ‘New Coke” formula aren’t too shabby, either.

Coca-Cola is also entering the alcohol market with a new drink in Japan, reports The Wall Street Journal. The new lemon flavored drink, called “chuhai” locally, will be the company’s first offered alcoholic drink and is the result of a $40 million investment in the market.

Don’t sleep on Coke. Even with the headwinds of an impending plastic bottle crackdown and changes in consumer preferences, the company is still finding ways to grow its business.

For our final earnings update today, let’s take a quick peek at embattled airline manufacturer Boeing Co. (NYSE:BA).

In news that will surprise no one, Boeing just reported a catastrophic second quarter.

Boeing posted a mind-numbing per-share loss of $5.82 Wednesday morning, CNBC reports, and it appears the company still can’t figure out how to fix its grounded fleet of 737 MAX planes.

Boeing booked $15.8 billion in revenue during the second quarter, well short of the$18.6 billion initially predicted by analysts. Good job, Wall Street.

CEO Dennis Muilenburg is calling the debacle “a defining moment for Boeing.”

That’s quite the understatement.

To make matters worse, Boeing announced Wednesday morning that it may halt 737 MAX production if it can’t get its act together, according to CNBC.

Boeing expects the 737 MAX will be back and safe to fly at the end of this year if it can get all the prerequisite software tested and working.

Good luck with that…

Sincerely,

Greg Guenthner

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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