Tesla Earnings 2nd Quarter 2014: Six Things To Watch For In Tesla's Results

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Tesla In China
People look at a Tesla car at a company showroom in Beijing on July 9, 2014. Tesla has begun delivering a right-hand-drive version of the Model S in Hong Kong and is aiming for the highly protected Japanese auto market this year.

UPDATE 4:50 p.m. EST: Tesla second-quarter results are out. Tesla confirms that it broke ground on a battery factory site in Nevada, but said other locations are still being considered. 

Original story begins here: 

Electric carmaker and stock market darling Tesla Motors Inc. will report second-quarter earnings after the market closes on Thursday. Analysts polled by Thomson Reuters expect the Palo Alto, California, maker of the Model S luxury electric car to eke out a slim $3.4 million in profit, down from $26 million in the same quarter last year, as the company piles most of its estimated $810.6 million in revenue back into growing the business. Tesla is expected to lose 11 cents per share because of these investments. 

Here are six things to watch for in the announcement.

  1. Keep an eye on international expansion expenses. “Certain costs should rise as the company expands internationally as it invests in technology and infrastructure,” Erfraim Levy, equity analyst for Standard & Poor’s, said in a research note. Risks, according to Levy, include slower-than-expected sales or delays in reducing costs.
  2. Watch the stock price after the news. Over the past year Tesla’s stock price has climbed nearly 84 percent to just over $220 as investors throw money behind their convictions the company will sell hundreds of thousands of cars annually by decade's end. 
  3. Watch for any updates on sales predictions. Tesla said earlier this year it expected to deliver 35,000 Model S sedans in 2014 and that its main hindrance right now is meeting demand for its cars with its current production capability. Sales will be one of the most important new developments in the upcoming earnings report. Unlike other automakers that report monthly, Tesla only reveals deliveries four times a year. 
  4. Watch China deliveries. Analysts expect Tesla to deliver as many as 1,300 Model S sedans in China this year.
  5. Look for news about planned new battery factory. Another important factor to watch in the upcoming earnings report will be any progress on the so-called gigafactory that Tesla and its main lithium-ion cell supplier Panasonic Corp. (TYO:6752) have signed on to constructing somewhere in the Southwest or California.
  6. Keep an eye on margins. The company's gross profit margin, another important factor to look for in the earnings statement, is expected to have increased slightly, to 26 percent, compared to just over 25 percent in the first quarter, an indication Tesla is trimming supply chain costs even as it spends heavily to build out its capacity to meet demand for the Model S.

 

 

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