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TSLA 12.72%
Shares skyrocketed on Tuesday after announcing plans to release their quarterly results earlier than expected, fueling speculation on the good news to provide.
Investors anticipate the upcoming quarterly report with even more suspense than usual because CEO Elon Musk had promised Tesla to record a net profit and a positive cash flow for the three months period. maintaining a strong production of its model 3 sedan.
Investors expected the results to arrive next week or later, but Tesla announced Monday it would release its third quarter financial report after the markets close on Wednesday. The Tesla share price, which fell nearly a third of its level on Monday since its peak this year, jumped 13% during Tuesday's session to close at $ 294.14.
"Game theory suggests that early publication / surprise is good news," Adam Jonas, an analyst at Morgan Stanley, said in a note to investors. "Tesla is at the most critical point of the ramp of its most important product (Model 3) and is arguably at the most critical point of its liquidity / access to capital since it's a public company. Why would Tesla advance the introduction of adverse news in the market now? "
Analysts are generally less confident than Mr Musk in Tesla's ability to generate profits. According to a survey conducted by FactSet, they estimated on average a net loss of 95 cents per share for the last quarter based on generally accepted accounting principles. This compares to a loss of $ 3.70 per share in the third quarter of last year. According to FactSet, revenues are expected to reach $ 6.1 billion, up from $ 2.98 billion a year ago.
Analysts expect Tesla to announce an adjusted loss of 3 cents per share over the last period, compared to $ 2.92 per share a year earlier, according to FactSet released Tuesday.
If Musk's predictions prove it, it would be Tesla's third quarterly net profit in 15 years. Tesla posted a profit of $ 22 million in the third quarter of 2016 and $ 11.2 million in the first quarter of 2013. It has never reported annual profit.
The high stakes for the quarter have heightened the focus on Mr Musk, whose recent series of blunders has raised questions about his state of mind. On August 7, he notably tweeted messages that he had obtained funds to privatize Tesla.
The tweets sent stocks skyrocketing before collapsing as it became apparent that an agreement was not finalized. Mr. Musk recently settled the claims of the Securities and Exchange Commission that his tweets have misled investors. As part of the settlement, he may remain as CEO but must step down as chairman in the coming weeks. He is not allowed to be president for three years. Tesla is expected to announce a new president and two independent directors soon.
Tesla's turmoil and Mr. Musk's episodes contributed to the sellers' argument that the company was overvalued and their bets against it.
Ben Kallo, an analyst at Robert W. Baird & Co., said Tuesday in a statement to investors. "While some think it will take several quarters of execution to turn the narrative, we believe that a strong Q3 and favorable outlook on teleconferencing should be enough to drive up the shares", a- he declared.
Some bears for a long time already anticipated a rebound. Citron Research, which has been negotiating Tesla for five years and filed a lawsuit against the company, said Tuesday it had changed its view of the automaker, saying its electric cars "destroy the competition."
Citron cited Tesla's sales results relative to the future potential of its competitors, including Chinese and European manufacturing projects, a compact SUV model and trailer production, as reasons to look long-term.
Earlier this month, Tesla announced total vehicle shipments in the third quarter of 83,500, up sharply from more than 26,150 vehicles a year ago, thanks to sustained model 3 production this summer. He said he delivered 55,840 models 3 during the period. The vehicle, which is priced lower than other Tesla models, is the cornerstone of Mr. Musk's commitment to transform Tesla, a luxury niche brand, into a mass-produced vehicle manufacturer.
Delays in achieving model 3 production targets have increased pressure on Tesla's limited cash availability, raising concerns among some suppliers about the auto company's financial outlook.
Many analysts expect Tesla to raise more money, partly to fuel its growth plans. But Mr Musk said that he did not want, saying that model 3 would generate funds.
On Wednesday, investors will focus mainly on Tesla's ability to generate liquidity and its forecast for the fourth-quarter Model 3 production.
Analysts surveyed expect on average that Tesla will provide 66,400 models 3 during the current period. The company has already announced that 8,048 small sedans were in transit at the end of the third quarter and will be accounted for as deliveries in the fourth quarter, suggesting that analysts expect Tesla to build at least about 58,000 Model 3s in the fourth quarter. during the quarter.
Write to Tim Higgins at [email protected]
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