On Wednesday, Tesla will report first-quarter earnings after the markets’ close.
We’ll cover the news and also CEO Elon Musk’s conference call with analysts after the earnings post.
Here’s what to expect:
- Tesla will make just over a $US1 billion for the quarter and deliver more than 10,000 cars. Consensus expectation for EPS is a $US0.50 loss, versus EPS of $US0.12 in Q1 of 2014.
- A lot of attention has of late been focused on Tesla’s struggles in China, which is somehow assumed to be a big growth market. But Jefferies analyst Dan Dolev, who recently initiated coverage with a bullish $US350 price target, has a good angle on this: he thinks China is nothing to worry about, given that demand for Tesla’s cars in the US and Europe could yield 500,000 in annual sales by 2020. It may be about time for the China complaint for peter out, allowing Tesla to buy some time to straighten out matters there.
- A few remarks from Musk about whether the company is successfully spending a “staggering” amount of money. Last quarter, Musk said that Tesla would be spending a lot to ramp up production over the next few years, in addition to constructing a huge battery factory — the “Gigafactory” — in Nevada. We might get a few clues about whether Tesla will fund this expansion on its own or raise new capital, something Musk previously said wouldn’t be necessary.
- A report of what total deliveries should be for the next quarter and the full year. Tesla said that it would deliver 55,000 Model S sedans and Model X SUVs in total in 2015 (the Model X starts deliveries, according to the company, in the third quarter). It has about 40,000 left to go, putting pressure on Q3 and Q4.
- Some mention of Tesla Energy, the new line of business that Musk unveiled last week. Tesla is going to start selling home and utility-scale batteries, and some experts think this could be a lucrative play. However, in the short term, Tesla won’t be able to build a huge number of “Poweralls,” the home solution, as it has to construct them at its Fremont, CA factory alongside its cars.
Over the past few weeks, Tesla shares have rebounded from a recent decline and are trading around $US230. That’s a far cry from the $US291 peak they hit in September 2014, but a meaningful improvement over the sub-$US200 levels the stock visited earlier this year.