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Tesla Tanke; Constellation turns to Gallo – The Motley Fool



Thursday morning was mixed on Wall Street, with cross-streams in various sectors of the market that caused stock indices to move in different directions. From 9am 23.35 EDT was Dow Jones Industrial Average (DJINDICES: ^ DJI) up 144 points to 26,362. S & P 500 (SNPINDEX: GSPC) was unchanged at 2,874, while Nasdaq Composite (NASDAQINDEX: IXIC) decreased 17 points to 7.879.

] Tesla (NASDAQ: TSLA) sharply lowered among companies published in 19459003, after the company announced its first-quarter 201

9 production and delivery numbers, which is less than that of automaker's shareholders had hoped to see. Meanwhile, Constellation Brands (NYSE: STZ) took another step in his effort to align his business closer to changing consumer power and selling some of his best-known wine brands in favor of concentrating on more promising opportunities.

  Dark colored Tesla Model 3 car on an empty road with a picturesque landscape behind.

Image source: Tesla.

Tesla hits the brakes

Shares of Tesla fell 9% after the Electric Vehicle Specialist reported its latest calculations for the first quarter. Tesla said it produced 77,100 vehicles during the period, including 62,950 Model 3 cars and 14,150 in combined units of Model S and Model X variants. The deliveries, however, amounted to about 63,000 vehicles, consisting of 50,900 Model 3s and 12,100 of the other two models. Although it was more than double that Tesla delivered in the first quarter of 2018, it declined by more than 30% compared to deliveries over the period ending three months ago.

Tesla pointed to the ongoing challenges that it faces in many of the neighborhoods. A major increase in deliveries to Europe and China created new logistical obstacles for Tesla to overcome, and the company showed that it had only delivered about half of the quarter's volume with only 10 days to go in the period. Despite the best efforts, Tesla was unable to bring all these vehicles to customers and said it had about 10,600 units still in transit worldwide. March 31.

As a result, Tesla warned that the net result will have a negative impact. Numerous adjustments to the price of Tesla vehicles will also contribute to weaker numbers than many had hoped to see.

Yet two major questions remained unanswered. Firstly, it is unclear how Tesla will address the situation in the long run. With a single factory in the Bay Area, the electric car manufacturer sees a high probability that production will again exceed deliveries in the current quarter. In addition, with S-X deliveries, it has fallen significantly that the cheaper model 3 could cannibalize the sale of higher price offerings that hit Tesla's long-term expectations.

Constellation picks pot over wine

Shares of Constellation Brands were higher by 4% after the alcoholic beverage company's release of the fourth quarter results. The constellation's earnings came out better than expected, reflecting strong demand for its Corona and Modelo beer brands.

In a major strategic shift, Constellation said it would sell some of its weaker companies. In particular, the company specified 30 different brands of wine and spirits that it will sell to privately owned E & J Gallo Winery for $ 1.7 billion. The sale will not completely dispose of Constellation's wine brand portfolio, which many had previously expected, but it will help improve the quality of the remaining stocks as the company focuses on its higher-margin products.

Constellation's beer business had dramatically surpassed its offerings of wine and spirits, and the company has also recognized the secular threat that the legalization of marijuana represents the broader alcohol industry. Many of Constellation's competitors have struggled to get close to matching Performance of Modelo and Corona. Meanwhile, the Constellation's share in Canopy Growth has already been extremely profitable from an investment point of view, and the beer producer remains optimistic about the prospects for cannabis. Investors agree and they like the refinement they see in Constellation's weight forward.


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