Often with a company like Tesla (NASDAQ:TSLA), guessing the earnings per share in a report a month in advance of its release can be as difficult as guessing the weather. There are so many rapidly changing metrics with this company that it seems an overwhelming effort to keep up with all of them. However, this time around Tesla has dropped enough specific clues that makes estimating the earnings per share for its fourth quarter a fairly easy task.

Calculating earnings
In order to make a reasonable estimate on earnings for Tesla, there are four basic parts you need to know, or at least be able to make a rational estimate of. They are sales, total overhead expense, interest expense, and gross profit, research, and development expense. For purposes of this exercise, let's assume that the $2.2 million in interest expense of the prior quarter is consistent with the fourth quarter (all figures in this article are non-GAAP).

Start with sales
Tesla CEO Elon Musk recently announced that the fourth quarter had 6,900 car deliveries. In order to arrive at the total revenue figure, you need the average selling price for each of these vehicles. In the last quarter's earnings release, Tesla stated that "[average selling prices] are expected to be relatively
flat sequentially as we continue to see a rich mix of options on incoming orders." Based on that, simply grab the average selling price of the third quarter and apply it to the fourth quarter.

Last quarter, Tesla reported 5,500 deliveries on $603 million in revenue. This comes out to around $109,600 per vehicle. Based on 6,900 deliveries for the fourth quarter, we should therefore expect revenue of around $756 million.

Gross profit
Tesla set a target of 25% gross margin on sales for the fourth quarter. Twenty-five percent of $756 million comes out to $189 million in gross profit; from that $189 million, subtract out R&D, overhead, and interest.

R&D plus overhead
Tesla said to expect a 25% increase in R&D expense and a 20% increase in overhead. Those amounts were $48 million and $67 million last quarter, respectively, so expect them to be $60 million and $80.4 million for this quarter, for a total of $140.4 million.

Subtract the $140.4 million from the $189 million in gross profit, then take away the $2.2 million in interest expense -- based on Tesla's disclosures and forecasts, the result is $46.4 million in earnings (assuming Tesla meets its expectations, which it rarely misses).

Per-share-earnings estimate
Based on 139 million fully diluted shares, look for Tesla to post at least $0.33 in earnings per share compared to analysts' estimates of $0.16 per share at the time of this writing.

Where the estimate of $0.33 can be wrong, aside from higher than expected expenses or lower than expected selling prices, is in the possibility that Tesla willfully decided to increase R&D or its Supercharger network build-out more aggressively than originally intended in response to the increased earnings and positive cash flow from the quarter.

Foolish final thoughts
For the foreseeable future, Tesla's demand eclipses its production capacity. As such, there is no seasonality with the quarterly results and each report should therefore be compared to the quarter immediately prior in order to measure progress. Therefore, annualizing the most recent quarter's adjusted earnings gives a reasonable run rate. If the $0.33 estimate proves to be accurate, it would put Tesla at an annual rate of $1.32 per share in earnings.

With a $170 share price, the P/E would still seem to be too high at 129. Still, that's a lot better than the last quarter's annualized P/E of 354, so it would be a sign that earnings may be on their way to reasonable valuation territory. The outlook for the first quarter and beyond coming with the earnings report should be interesting. Being long Tesla may not be for the faint of heart, but betting against it appears far more dangerous if earnings double.