Tesla Earnings: What to Look for From TSLA - Investopedia

Electric vehicle maker Tesla Inc. (TSLA) is scheduled to report 3Q 2019 earnings after the market close on Oct. 23. A key metric that investors are likely to focus on is vehicles delivered, which a preliminary report from the company indicates is nearly 39% greater than in the same period of 2018.

For the year to date through the close on Oct. 17, 2019, Tesla's stock price has fallen by 21.2%. By comparison, the S&P 500 has gained 19.6%. For 2Q 2019, Tesla reported revenue that was up by 58.7% year-over-year and a loss, as measured by EPS, that was 45.3% smaller.

Meanwhile, the 2Q revenue figure was 1.4% lower than the consensus estimate, while the company's loss, as measured by EPS computed in accordance with GAAP, was 182% larger than the consensus had expected. Tesla's earnings report was released after the close on July 24, and the stock declined by 13.6% on the following day.

Tesla has been increasing quarterly revenue steadily since the start of 2016, with the 2Q 2019 figure almost exactly 5 times greater than sales in 1Q 2016. However, the company has yet to become consistently profitable. After posting positive net income and EPS in the last two quarters of 2018, the only profitable reporting periods in its history, Tesla has again reverted to operating at a loss in 2019.

Tesla Earnings for 3Q 2019
	3Q 2017 Actual	3Q 2018 Actual	3Q 2019 Estimate
Earnings Per Share	-$2.04	-$4.22	-$1.35
Revenue	$2.790 billion	$4.002 billion	$6.513 billion
Vehicles Delivered	26,150	83,500	97,000 (actual)

Sources: YCharts, Tesla Investor Relations, Statista

Vehicles delivered is a critical metric because sales revenue is only fully realized when the customer can take delivery of a vehicle that he or she has ordered from Tesla. The good news for Tesla is that demand for its products remains strong. In recent years, however, production bottlenecks limited the company's ability to meet that demand.

Today, many of those production problems appear to have been resolved, but distribution now appears to have become the critical limiting factor for Tesla, as reported by the International Business Times. Demand is growing for Tesla vehicles outside the U.S., particularly in Europe and China. In Europe, Norway, Sweden, and Germany are leading markets. China, meanwhile, is Tesla's largest overseas market overall, and the Chinese government is in the midst of strong push to reduce air pollution by promoting the use of electric vehicles (EVs), with a goal of seeing annual EV vehicle purchases reach two million by 2020, per the IBT.

Tesla's report that 97,000 vehicles were delivered in 3Q 2019 represents a 1.9% improvement over the figure of 95,200 delivered in 2Q 2019. The 2Q figure was released after the close on July 2, spurring a 4.6% jump in the stock price on the next day. However, as noted above, a much bigger than expected loss sent the stock tumbling on July 25. The net result was that Tesla ended trading on July 25 a slim 1.9% above its close on July 2.

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