Investor's Corner

All eyes on Tesla 2016 financial results and news of Model 3 tomorrow

Tesla is scheduled to report its fourth-quarter and full year financial results after market close on Wednesday. Following the update letter, to be posted onto Tesla’s Investor Relations site, CEO Elon Musk and Tesla management will hold a live Q&A session with analysts beginning at 2:30 pm Pacific Time.

Year-Over-Year Growth

While profitability and earnings per share are not expected to have fully flipped to the positive as a result of massive capital spend taking place at both the Fremont, Calif. factory and Tesla’s Gigafactory facility in Nevada, we can expect Musk to give pause during the earnings call and provide insight on updates being made to support Tesla’s upcoming Model 3 production.

Baird analyst Ben Kallo put it simply, “That’s where all eyes are now”.

Tesla stock hit record highs over the last few weeks as investor confidence in Tesla’s ability to deliver Model 3 on time continued to grow. The company’s stock price has soared 50% since December.

On January 3rd, Tesla reported that it had produced 24,882 vehicles for the fourth-quarter and 83,922 vehicles for the full year. This represented an increase of 64% from 2015. However, the company missed its quarterly delivery target by nearly 3,000 vehicles, citing “short-term production challenges starting at the end of October and lasting through early December from the transition to new Autopilot hardware.”

These numbers are impressive considering where Tesla started, but pale in comparison to where the company will want to be over the next year when the company expects to deliver nearly a half million vehicles annually.

Profitability and Earnings per share

Tesla has historically struggled with profitability and earnings per share due to what has been a continuous stream of capital intensive projects, while acquiring a new major business unit almost every year for the last four years.

Analyst opinions coming out of MarketWatch peg Tesla at an adjusted fourth-quarter loss of 51 cents per share. This is slightly better than fourth-quarter 2015 which came in at an 87 cent loss. Estimize has the most optimistic outlook for Tesla saying that the electric car company will lose only 3 cents per share. Overall, analysts from large institutions all seem to agree that Tesla will report a negative EPS.

Business Unit Updates

The big news for the week is that Tesla will prepare its Fremont factory for Model 3 pilot production. Full production of the Model 3 isn’t expected until after July but nonetheless, the company will likely reveal its laser-focused intent on delivering first units come late year .

Tesla Energy has also come into its own in the last few weeks after completing the world’s largest grid-scale battery installation project consisting of a 20MW / 80MWh Powerpack system installed for Southern California Edison.

Beyond Model 3, announcements for the Model Y which is expected to be a smaller SUV / CUV version of the Model 3, a Tesla pickup truck, and the Tesla Semi project are all expected to make public debuts this year.

We’ll be reporting highlights from Tesla’s earnings call Wednesday afternoon Pacific Time.

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