Will Tesla Motors Inc Lower Its December Quarter Estimates?

Tesla, after the close of market on Friday, announced that it delivered 11,580 vehicles in the September quarter. Though this number is in line with its guidance of selling around the same number of vehicles as it sold in the second quarter, it could be a bit short of analysts’ expectations, says a report from Forbes by Chuck Jones.

Will Tesla meet its full-year target?

For the complete year, Tesla is expected to sell 50,000 to 55,000 vehicles, which could be hard for the company to meet as in the first three quarters, Tesla delivered 33,157 vehicles i.e., on average, 11,052 vehicles per quarter. Thus, to meet the low end of its 50,000 to 55,000 guidance, it will have to deliver 17,000 vehicles during the fourth quarter.

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Tesla delivered 890 cars per week in the September quarter, and if we consider that the one-week planned shutdown impacted deliveries, then the number is 965 vehicles per quarter. To meet the target, Tesla will need to ramp up its deliveries by at least 35% on a weekly basis to 1,307 vehicles from the September quarter, says the report. The company introduced the Model X on the same production line, and this makes it a steep proposition.

So it could result in analysts lowering their projections for the December quarter again. Tesla is expected to generate $1.88 billion in revenue and earnings per share of 42 cents as per analysts’ estimates.

“The stock may still mostly hold up due to its Teflon shield regarding lower vehicle sales, revenue and earnings projections,” Jones said, adding that he expects Tesla CEO Elon Musk to reiterate the company’s weekly production and sales target for 2016 to 1,800 vehicles per week from 1,600 as the gigafactory and the Model 3 were on the schedule when the September quarter results were announced.

No benefit of Model X in September quarter

For the third quarter, the delivery number was up 49% on a YoY basis. It is very likely that the newly released sport-utility vehicle did not provide any benefits to the company in the third quarter. At an event in Fremont, Calif. on Tuesday night, the company delivered the first six units of the Tesla Model X to executives and board members, including Google co-founder Sergey Brin and early Tesla investor and board member Steve Jurvetson, says a report from The WSJ.

In pre-market trading today, Tesla shares were up 1.38% at $250.99. Year to date, the stock is up by over 11%, while in the last year shares are down by almost 3%.