The well-known electric car maker, Tesla (TSLA, Financial), will be reporting its third-quarter numbers on November 5, and analysts have started speculating on their positions in the company. The question which is on every investor’s mind is – Will the company surprise the market with several positives, or will it terribly disappoint? So let’s find out what are the expectations from Tesla’s quarterly earnings round the corner.
From the analysts’ desk
On an average, analysts are expecting Tesla to report losses of $0.01 per share on $889.3 million in revenue. That stands comparable to last year’s third quarter non-GAAP earnings of $0.12 per share on $602.6 million in revenue which had outpaced the consensus estimates. The company had previously guided for production of between 9,000 and 11,000 Model S sedans during the third quarter. The auto maker’s management had also projected a gross margin that is similar to what it was in the second quarter of the fiscal year.
For the full year, Tesla has expectations to deliver 35,000 cars – therefore, it would be best to stay hooked to the earnings release to find out how many cars were delivered during the quarter to be able to estimate the number of cars that need to get delivered during the coming quarter in order to reach the yearly target set by the company’s top brass.
Looking beyond the number stream
Investors of Tesla are interested to know whether the company is on track to deliver 100,000 cars by end of 2015 as per its ambitious goal setting exercise. Updates on the Model X which is the SUV launched by Tesla and the mass-market Model 3 are also on the list. The Model X is expected to go on sale next year sporting distinctive falcon wing doors. CEO Elon Musk has promised a Model X prototype, as close to the production as possible, for later this year.
Well, the CEO has already created a stir in the investors’ corner by tweeting that September sales worldwide had hit a record high and were up 65% in North America, a market that many feel is getting saturated for Tesla’s Model S luxury sedan which starts at about $70,000.
For the Model 3, which is being promoted as a mass market car, it is expected to have a cost of around $35,000; and thus Tesla requires the batteries to be made cheaper and more efficient. Also investors want to know how the sluggish global economy and lower oil prices are affecting Tesla’s outlook. The company wants to grow more customers in China and in Europe, while in the U.S. lower oil prices could deter some car buyers from moving from conventional engines to electric cars.
In Tesla's July shareholder letter, it was mentioned that the first half of 2014 was an active one, and the rest of the year was predicted to be busier. Tesla’s Giga Factory’s development was going on well. Tesla had formalized the agreement with Panasonic for cell manufacturing at the Giga factory, and the company was adding new production capacity at the Freemont facility to allow it to meet the worldwide demand for vehicles. The company’s current quarter will lay better understanding as to the progress being taken with respect to improvement of production at its facilities.
Final word
Tomorrow could be a red-letter day for Tesla if it beats all expectations and shows better performance in terms of meeting the delivery targets and its cars have continued demand in the market as oil prices fall. More is in store after the results get released. Until then, let’s stay tuned.
