Please ensure Javascript is enabled for purposes of website accessibility

Tesla Inc. Earnings: Mark Your Calendar

By Daniel Sparks - Apr 16, 2017 at 4:31PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With Tesla's Model 3 launch planned for July, the company's first-quarter results will give investors a window into the electric-car maker's business at a crucial time.

Electric-car maker Tesla (TSLA 4.53%) plans to announce its results for its first quarter of 2017 on Wednesday, May 3, the company said on Thursday. Ahead of its important Model 3 launch later this year, the quarterly update comes at a critical time for the company. Not only will it help investors get a glimpse into Tesla's financials ahead of its plans for a rapid ramp-up in vehicle production, but it will likely provide some insight into Tesla's progress on bringing its Model 3 to market.

Ahead of Tesla's earnings release, here are three things investors might want to start thinking about.

Tesla final body assembly line for Model X at factory in Fremont, California.

Tesla vehicle production. Image source: author.

1. Expect a meaty automotive gross profit margin.

For Tesla, making electric vehicles has proved to be quite lucrative on a per-vehicle basis. Sure, the company is spending billions of dollars on expanding its business, leading to overall losses. But investors can take comfort in the company's solid automotive gross profit margin, knowing that if Tesla wanted to report profits today it could simply scale back its growth ambitions.

Tesla's non-GAAP automotive gross margin, which excludes zero emission vehicle credits and stock-based compensation, was 22.2% in the company's most recent quarter. Its GAAP automotive gross margin was 22.6%. In Q1, however, Tesla expects an even better automotive gross margin. Management said in the company's fourth-quarter update it expects non-GAAP and GAAP automotive gross profit margins to "recover in Q1 to Q3 2016 levels and then continue to expand in Q2 2017." The company's non-GAAP and GAAP automotive gross profit margins in the third quarter of 2016 were 25% and 29.4%, respectively. 

2. Capital expenditures may rise sharply.

Potentially giving investors some insight into the aggressiveness of Tesla's preparations for high-volume Model 3 production, investors can look to Tesla's capital spending for the quarter. While Tesla didn't provide specific guidance for its capital spending in the first quarter, it did say it expected to spend between $2 billion and $2.5 billion during the first half of the year -- well above Tesla's $1.3 billion in capital expenditures during the entire year of 2016.

"We continue to focus on capital efficiency while also investing in battery cell, pack and energy storage production at Gigafactory 1," Tesla said about its plans for capital expenditures.

Model X being assembled in Tesla's vehicle factory.

Rapidly rising Model X deliveries helped Tesla report record deliveries in Q1. Image source: author.

3. Will Tesla raise its guidance for vehicle deliveries?

Since Tesla has already shared its vehicle deliveries for its first quarter -- a record 25,000 units -- investors will likely turn their attention to any commentary on what to expect from Model S and Model X deliveries in Q2.

Going into Tesla's first quarter of 2017, the company said it expected to deliver 47,000 to 50,000 Model S and Model X units combined. So, with about 25,000 units already delivered, this leaves about 22,000 to 25,000 units left to be delivered during the first half of the year. Will Tesla raise its guidance for vehicle deliveries during the first half of the year after such a strong first quarter?

Tesla plans to post its earnings release for its first quarter after market close on May 2. Stay tuned to The Motley Fool for more Tesla coverage, as well as an analysis of the company's first-quarter results when they go live. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
$737.12 (4.53%) $31.91

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.