Tesla Earnings Preview: All Eyes On Unit Guidance

February 9, 2016

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Tesla Motors Inc (NASDAQ: TSLA) will report Q4 earnings results after Wednesday’s market close. The stock has seen quite a fall since the start of the year.

Wall Street’s fourth-quarter forecast calls for EPS to swing from a $0.13 loss in last year’s quarter to a profit of $0.09 this year, though that estimate ticked down a penny in the past 60 days. The consensus of 193 Estimize respondents sees EPS of only $0.04 for the three months that ended in December.

Revenue narrowly topped consensus estimates in the previous two periods. This time, Estimize is looking for about $1.79 billion, in line with what Wall Street expects. That would be more than 63 percent higher than year-ago revenue.

Estimize Founder Leigh Drogen recently wrote, “This year Tesla delivered a record 50,000 vehicles but failed to meet volume expectations the company set earlier in the year… [It] has made heavy investments in launching its first SUV and building out a sustainable battery. If the Model X SUV misses sales forecasts like the Model S sedan, it could have a crippling effect on the stock in 2016. As production ramps up, energy credits from green technology are expected to shrink proportionally to sales growth.”

A Benzinga Twitter poll asked what was most important from the earnings call. Tesla’s unit guidance was the faraway winner, with 51 percent of the vote. An update on the Model 3 garnered 27 percent of the vote, while the company’s top line (11 percent) and bottom line (11 percent) results seemed to mean very little.

Tesla has been beaten up in 2016. What do you think is most important in today's Q4 earnings report? $TSLA

— Benzinga.com (@Benzinga) February 10, 2016

According to Trip Chowdhry of Global Equities Research, Tesla investors should consider the company’s move to discontinue a battery as a “positive development.” The analyst suggested that this marks a “step forward in preparation” for the launch of the Model 3 vehicle.

Going into the final hour of trading, shares were down more than 1 percent at $146.50. The stock began the year trading above $220.