Tesla Motors Inc (NASDAQ:TSLA) is scheduled to release its third quarter earnings report on Wednesday after closing bell. Will the automaker surprise to the positive, or will it disappoint?
What to expect in Tesla’s earnings report
On average, analysts are expecting Tesla Motors to report losses of 1 cent per share on $889.3 million in revenue. That’s compared to last year’s third quarter non-GAAP earnings of 12 cents per share on $602.6 million in revenue—both of which were significantly ahead of consensus estimates.
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Tesla previously guided for production of between 9,000 and 11,000 Model S sedans during the third quarter. The automaker projected a gross margin that’s similar to what it was in the second quarter. Operationally, management expected to be close to flat or slightly profitable in the quarter.
For the full year, Tesla expects to deliver 35,000 cars or more, so the number of third quarter deliveries will tell us how many cars the company must deliver in the fourth quarter in order to hit that target. Tesla guided for approximately 7,800 sedans in the third quarter.
Beyond the numbers
Of course there are many other factors that will play a role in where Tesla shares move after the company’s earnings report. For example, the automaker idled its Fremont, Calif. plant during the third quarter to improve production capacity. The facility is also now capable of producing the Model X crossover vehicle in addition to the Model S, so any update on when Model X deliveries will begin will be a good thing. Currently, the automaker plans to begin producing it in the spring.
Updates on the gigafactory could also be a catalyst for Tesla stock, as could details about demand in China, a key market for the automaker.
Where will Tesla stock go after earnings?
In a post last week, Forbes contributor Gordon Scott suggested that shares of Tesla Motors may move downward after the company releases its earnings report on Wednesday. He points to recent price action that suggests investors may be starting to worry.
One of the things they may be worrying about, according to Scott, is the introduction of the D version of the Model S. While it’s certainly a welcome addition to Tesla’s line of cars, it didn’t take long for shares to slump after its introduction. Also he notes that the addition of another model makes Tesla’s business model more complex.
So will Wall Street continue to have a taste for risky Tesla shares? It’s anyone’s guess at this point.