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Tesla $TSLA reports Q2 earnings after the market close Wednesday as their Model 3 made it's first delivery this weekend. To be prepared we go into depth in these seven key areas.

Tesla $TSLA reports Q2 earnings after the market close Wednesday as their Model 3 made it's first delivery this weekend. Tesla is much more than an electric car company these days. Tesla earnings releases and Elon Musk's conference calls leave much up to conjecture and we have seen violent stock price swings off them.

To be prepared we go into depth in these key 7 areas.

1. The P&L
2. Grid Batteries
3. Raising Cash
4. Autopilot Updates
5. SolarCity Plan
6. Missed Car Shipments
7. Model 3 Reservations

1. The P&L

The company doesn’t yet make profits and not even Elon Musk expects it to do so right now. Analysts consensus estimates  see Q217 per-share losses widening to $1.80 from $1.61 a year ago. Much of the loss is on upfront  Model 3 costs.

Revenue is expected to double to $2.55 billion, as deliveries were up from 18,000 a year earlier. Sales of Tesla cars and batteries for buildings and the power grid are growing. The question is can production match demand and can Tesla sustain itself through a market downturn.

2. Grid Batteries

The Giga batteries are an area where many have increasing hopes (away from the Tesla zealots). Musk last month talked of a massive battery installation in South Australia. Concerns are the lofty statements and production issues, is their a pattern here? Are sales of the Powerwall and Powerpack grid batteries growing substantially? Over time sales of the batteries are expected to grow more rapidly than car sales.

3. Raising Cash

One thing Tesla does better than most is burn through cash to try to deliver on increasingly aggressive goals. The question is will Tesla take to the public markets and raise even more money while the stock market is still near ATH. 

4. Autopilot Updates

With Google amongs other now in this space and Tesla's past issues with the world’s first known fatality in an autonomous car in May last year when a Tesla Model S Autopilot software engaged. Analysts will watch Musk on developments on this segment.

5. SolarCity Plan

With SolarCity now merged into Tesla we can watch as Musk delivers his goal of a one-stop sustainable energy store. A combined SolarCity and Tesla would make and sell solar panels, batteries, and electric cars all under one roof. El Grando Musk put a trillion dollars worth of the TSLA=SCTY merger. He expects $150 million in savings within the first year of the close of the deal.

Analysts will be watching  SolarCity guidance for their annual solar installations and expected bookings of home rooftop solar panels. 

6. Missed Car Shipments

Tesla continues to miss car shipment guidance. Tesla continues to face a slower than expected ramp up of production and delivery of its cars. In a rampaging stock market with the Nasdaq pinging record highs this has been glossed over so far. No doubt Tesla has ambitious production goals with deliveries falling to 22,000 in Q2 from 25,000 in Q1.

Consider all the risks and misses with Tesla saying they will aggressively produce 500,000 cars per year by 2018.

7. Model 3 Deliveries

Tesla’s Model 3 car has arrived, forst deliveries were to staff this weekend. The base price is $35,000 with the fully loaded version around $59,000. How many will be produced and how many will be sold? Musk boasted last year it has received close to 400,000 reservations for the car. What worries everyone is how many are genuine, given within a month over 15% were cancelled.

Tesla's Last Earnings Report

Electric automaker Tesla (TSLA) Q1 earnings showed revenue of $2.70 billion while a loss per diluted share shrank to $2.04 from $2.13 a share. The adjusted diluted loss per share was - $1.33. Net loss widened to 330.3 million from last year's loss of $282.3 million. 

The net loss widened to 330.3 million with $100 million in SolarCity purchase accounting changes, $35 million in forex translation and $31 million n net loss attributable to non-controlling interests. 

Reaction Tesla Inc NASDAQ: TSLA  Pre-market: 305.60 -5.16 (-1.66%)

TSLA's vehicle production in 1Q17 jumped 64%, resulting in 25,051 deliveries. Automotive revenue grew 123% to $2.3Bil. During the quarter TSLA generated $117MM in cash and spent $553MM in capital expenditures. Tesla had $4.0Bil in cash at 1Q17 end, highest yet in the company's history.

Source: https://alphastreet.com/app#/company/TSLA

Previous Guidance
-  $TSLA sees 2Q17 operating expenses to be flat to slightly up from 1Q17. Tesla expects that year-to-date capital expenditures will be slightly over $2Bil by the time Model 3 production starts.
- First half 2017 outlook remains unchanged at 47,000 to 50,000 deliveries, representing 61% to 71% annual vehicle delivery growth.

Its not all about Model 3:

We have seen a belief among some that Model 3 is the newest and more advanced generation of Model S. This is not correct. Model S will always have more range, more acceleration, more power, more passenger cargo room, more displays (two), and more customization choices, and Model S, X and 3 will all have equivalent Autopilot functionality. - Elon Musk in Q117 Earning Call

$TSLA said it needs to come up with Model Y in order to deliver on its target of 1 million cars per year by 2020. The company said it will come up with Model Y in late 2019 or 2020.

From The Pit

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