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After a pretty dramatic couple, Elon Musk seems to be eager to let the world know how he played last quarter.
On Monday night, Tesla (TSLA), whose earnings reports usually come to a less than a month after a quarter has ended, surprisingly announced that its Q3 report will arrive on Wednesday afternoon. An earnings call will start at 6:30 pm Eastern.
TheStreet will be live blogging Tesla's earnings after the close on Oct. 24. Please check our home page then for more details.
With the help of a bullish call from Citron Research, Tesla shares rose 12.7% in Tuesday trading following the announcement. The price of a roller coaster ride has risen to more than $ 420 per share, and (contrary to fact) As part of a settlement for an official civil society, Musk agreed to step down as Tesla's chairman for three years; DOJ criminal probe remains outstanding.
On average, analysts polled by FactSet expect Tesla, which promised to become profitable GAAP and positive cash flow in Q3, to post revenue of $ 6.05 trillion (up 103% annually) and GAAP EPS of negative $ 0.95. The non-GAAP EPS consensus is a more favorable negative $ 0.03. However, Tesla's commentary on future production, sales and earnings are generally more important than its reported revenue and EPS figures.
TheStreet will be live-blogging Tesla's Q3 report and its earnings call. Here are some things for investors to keep an eye on as the festivities begin.
1. Profit and Cash-Flow Expectations
As the Q3 consensus implies, many analysts doubt that Tesla, which is now more economies of scale for Model 3 production, turned profitable last quarter. However, on average, they do not expect a positive Q3 and Q4, and for non-GAAP EPS to improve to $ 0.78 in Q4 (the GAAP consensus is at negative $ 0.08).
Tesla, which has conducted its capital spending as part of its efforts to turn a profit and avoid a second-half capital increase, should offer a fresh commentary on its profit outlook in its shareholder letter. The company has been endorsing that tariffs and currency swings (a stronger dollar) are impacting its bottom line some.
2. Model 3 Production Guidance
As usual, Tesla 's quarterly vehicle deliveries and production have been made after the end of its quarter. For Q3, the company reported producing 53,239 Model 3 units, up from 28,578 in Q2. However, with Tesla reporting it produced over 5,300 units during the final week of Q3, the company fell short of a goal of upping production to 6,000 units per week by late August.
Any changes to Tesla's production targets will be closely watched. In its Q2 shareholder letter, the company insists on growing model production to a level of 10,000 units per week "as fast as we can."
3. Model 3 Margin Trends
Tesla guided in August for its Model 3 gross margin (GM), which was just "slightly positive" in Q2, to improve to 15% and 20% in Q4, as the company benefits from greater scale. However, this is a more important outlook than Tesla's original forecast for a 25% GM Model 3+ ounce production "stabilizes" at 5,000 units per week, in spite of the fact that Tesla has not yet begun production of its Standard Battery Model 3 , which was promised to have a $ 35,000 starting price.
4. Model S and X Sales Expectations
Tesla reported 14,470 units of its luxury sedan in Q3, and 13,190 units of its X luxury crossover model. The numbers were better than analyst expectations.
And though Tesla cautioned that its Chinese Model S and X sales are being hurt by higher prices, the company reiterated guidance for 100,000 combined 2018 Model S and X deliveries. 2019 guidance has not been issued yet.
5. Comments on the Chairman Search
Musk has not yet announced who Tesla's next chairman will be. However, it was reported a couple weeks ago that director and 21st Century Fox CEO James Murdoch is the frontrunner to get the job. Musk might get a question or two on the call about his company's chairman search.
6. Comments on the Standard Battery Model 3
In June, Musk pointed out that production for the Standard Battery version of the Model 3 would start in Q1 2019. And last month, after touring Tesla Reno Gigafactory, Investor Worm Capital would start shipping "in the next eight months."
The company could get a question or two about how it sees production and deliveries progressing for the cheapest version of the Model 3 in 2019. Last week, Tesla announced it would begin selling a "Mid-Range" version of the Model 3 that starts at $ 45,000 Premium Package Bundled Upgrades.
7. The Energy Unit's Performance
Q2 was a rough quarter for Tesla's Energy Generation and Storage Segment, which is strong growth for its battery systems. The segment had a GM of just 11.8%, down from 14.7% a year ago. And while revenue rose 31% to $ 374 million, it fell short of a $ 418 million consensus.
For Q3, the consensus is for $ 377 million (up 19%), and a gross profit of just $ 20 million.
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