After Hours: Tesla's Musk Reassures, and Veeva's Victory Sours

Eric Volkman, The Motley Fool

Updated Wed, May 29, 2019, 7:05 PM

Musk mollifies Tesla troops

Elon Musk clearly wants to calm the nerves of Tesla employees. In the second instance in as many weeks, the high-profile CEO sent an email to his workforce reassuring them that the company was on the right track. Not only that, he said it's poised to set a new all-time high for quarterly deliveries.

According to a report from Bloomberg, directly quoting the email, Musk admitted that "[w]hile our demand is strong, we have a lot of vehicle deliveries to catch up to in order to have a successful quarter," referring to the company's current Q2. This seems like an attempt to reassure Tesla's troops that growth is on deck, despite the very disappointing deliveries figure Tesla posted in Q1 that has badly affected its stock.

Although the company has estimated that its delivery total will be in the range of 90,000 to 100,000 automobiles this quarter, many analysts and pundits believe the actual number will be significantly lower. Tesla's record for quarterly deliveries is 90,700.

Reiterating an assessment he made in that previous email to employees, Musk proclaimed that "if we execute well, Q2 will be an all-time record for Tesla vehicle deliveries and an awesome victory!!"

If post-market traders are swapping Tesla shares on the basis of this new email, they aren't overly convinced by Musk's words. The company's stock is trading flat at the moment.

Palo Alto Networks wheels, deals, and reports

It was certainly a busy day in the California headquarters of cybersecurity purveyor Palo Alto Networks (NYSE: PANW). Following the market's closing bell, the company announced its latest quarterly results, plus a pair of fresh acquisitions.

For the company's Q3 of fiscal 2019, it booked revenue of almost $727 million, which was 28% higher on a year-over-year basis. Adjusted net income came in at just over $130 million ($1.31 per share), beating the Q3 2018 result by 30%. Both line items beat the average analyst expectations, in addition to the company's own estimates.

Yet Palo Alto Networks' forward guidance for profitability has come up short. The company says it expects to book earnings per share (EPS) of $1.41 to $1.42 for the current Q4. Analysts, however, were modeling $1.55.

Palo Alto Networks also announced it had made a pair of deals. It signed agreements to purchase Twistlock, a container security specialist, and PureSec, which is described as "a global leader in serverless architectures security." Palo Alto Networks will pay roughly $410 million in cash for Twistlock; it is not disclosing the terms of the PureSec deal. Both companies are privately held.

Investors seem spooked by the latest news, most likely about that Q4 profitability estimate. Palo Alto Networks stock is down by 5% in after-hours trading.

Veeva Systems beats, but slides

Elsewhere in the tech results sphere, Veeva Systems (NYSE: VEEV) unveiled its Q1 of 2020 following market close.

The quarter saw the specialist cloud services provider increase its revenue by 25% on a year-over-year basis, to almost $245 million, on the back of subscription revenue that rose 27%. On the bottom line, Veeva netted just under $79 million ($0.50 EPS) in adjusted profit for a 53% improvement.

On average, analysts had expected the company to book approximately $238 million in revenue and a per-share adjusted net profit of $0.44.

For the full year, Veeva raised its guidance. It's now anticipating a top line of $1.045 billion to $1.050 billion, with adjusted EPS of $2.01 to $2.03. Both ranges are higher than the average $1.04 billion and $1.92, respectively, projected by prognosticators.

Might this stock be suffering from Earnings Beat Fatigue? Veeva's a strong performer that has topped EPS estimates in its last five quarters -- perhaps the market is no longer impressed by these victories. At the moment, the stock is down by almost 4% in late-hours action.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Palo Alto Networks, Tesla, and Veeva Systems. The Motley Fool has a disclosure policy.

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