Tesla Motors Inc (TSLA) Q3 Earnings Preview: Analysts Are Optimistic

Tesla Motors Inc (NASDAQ:TSLA) is set to report its third quarter results on Tuesday, Nov. 5 after the market close. Analysts polled by Thompson Reuters expect the company to report $534.6 million in sales, up 967% from $50.1 million in the corresponding quarter last year. Earnings should come in at $13.4 million or 11 cents a share, compared to a loss of 92 cents a share in the same period last year. For the full-year, analysts expect revenues to rise 461% from the previous year and earnings to reach 61 cents.

Tesla Motors Inc (TSLA) Q3 Earnings Preview: Analysts Are Optimistic

Tesla’s expansion-related charges

However, the company’s capital-intensive international expansion will result into hefty one-time charges. Tesla Motors Inc. (NASDAQ:TSLA) is setting up charging networks, stores and service centers in Europe. Analysts believe that the one-time charges will bring down the actual earnings to a loss of 11 cents. But sales have grown rapidly over the past few quarters as CEO Elon Musk aims to sell 21,000 Model S units this year.

Gross margins including ZEV credit earnings are expected to decline from 25% in June quarter to 22.4% in the quarter ending September 30. That’s because the electric carmaker has been lowering its reliance on sales of zero-emission credits to other automakers. Excluding ZEV credits, gross margins stood at 5% in Q1 and 13% in Q2, respectively. Elon Musk aims to hit 19% gross margin rate, excluding ZEV credits, in Q3.

Tesla Motors Inc (NASDAQ:TSLA) is likely to report expansion-related charges for years to come as the company grows its international presence. Investors and analysts are bullish on the stock not because its paltry current profits, but the potential it holds. The company plans to launch the Model X, an SUV crossover vehicle, by the end of next year. Tesla Motors Inc (NASDAQ:TSLA) aims to sell 40,000 Model S cars worldwide in 2014.

Tesla to easily achieve its 2013 goals

Analysts believe that Tesla Motors Inc (NASDAQ:TSLA) can easily achieve its goal of delivering 21,000 cars in 2013. During the first quarter, it delivered 4,750 units, and the figure rose to 5,150 units in the June quarter. For the July-September quarter, the company is expected to deliver 5,580 units in the U.S. Including international deliveries, total sales would surpass 6,200 units in Q3.

Tesla Motors Inc (NASDAQ:TSLA) shares were hurt recently after a video of a Model S car catching fire went viral. The stock was up 1.39% to $162.17 in pre-market trading.