On Wednesday, electric-car maker Tesla Motors (TSLA -1.92%) gave its second-quarter earnings release and conference call a date: Aug. 5. With shares up about 15% since the company reported first-quarter earnings, and given Tesla's pricey market capitalization of about $34 billion, the report will be an important one. Will Tesla be able to deliver the financial results and forward-looking guidance investors are hoping for?
Tesla P85D Model S. Image source: Tesla Motors.
Expectations
Both Tesla's reported earnings and revenue will be key when the company reports results. Reflecting Tesla's rapid growth in vehicle deliveries during Q2, analysts, on average, expect Tesla to report non-GAAP revenue of $1.16 billion -- up 35.4% from the year-ago quarter.
Analysts' outlook for Tesla's non-GAAP earnings per share, however, isn't so optimistic. The consensus estimate is for a non-GAAP EPS loss of $0.60 -- down from an $0.11 profit in the year-ago quarter. This expected decline reflects the company's heavy spending on research and development, and sales, general, and administrative operating expenses. Tesla is investing heavily in growing its sales and service footprint, and is preparing for the launch of its upcoming Model X SUV in two months and its lower-cost Model 3 in just over two years.
The strengthening of the dollar is also expected to negatively affect Tesla's profitability during the quarter. While Tesla did increase the price of Model S in its European market to make up for a weaker euro, the increase only applies to deliveries in Q3 and beyond. Tesla management expects this to negatively impact Tesla's gross margin by "slightly more than 100 basis points" during the quarter.
During Q1, Tesla exceeded analysts' expectations, reporting non-GAAP revenue of $1.1 billion, and a non-GAAP loss of $0.36 per share. Analysts expected revenue of $1.04 billion and a loss of $0.50 per share.
Looking forward
Beyond revenue and earnings, investors will be particularly interested in the company's outlook for vehicle sales, as well as an update on Model X and Model 3. If Tesla is on track with its plan for the year, guidance for third-quarter vehicle deliveries should represent a meaningful sequential increase.
Tesla has indicated that it plans to deliver 55,000 deliveries this year, with about 60% of these deliveries occurring during the second half of the year. Furthermore, Tesla expects about 5,000 of these deliveries to be its soon-to-be-launched Model X.
Model X prototype. Image source: Tesla Motors.
Teslas has already delivered about 39% of its annual guidance; this leaves about 33,448 expected deliveries for the second half of the year. Assuming Model X deliveries for 2015 are about 5,000, and the majority of these X deliveries occur during Q4, Tesla's path to 55,000 deliveries in 2015 could mean about 14,200 deliveries during Q3, and 19,000 in Q4.
Investors, therefore, should look for Tesla's guidance for third-quarter vehicle deliveries to be at least 13,000. Furthermore, as the end of the year approaches, investors will be looking to see whether or not Tesla maintains its full-year guidance for 55,000 total deliveries.
Tesla's second-quarter financial results will be available to view at Tesla's investor relations page after market close on Wednesday, Aug. 5. Investors can tune into the company's second-quarter earnings call at 2:30 p.m. Pacific Time.
Stay tuned to The Motley Fool for more coverage and analysis of Tesla stock ahead of earnings, as well as after earnings.
