Tesla Motors Inc recently reported its preliminary June quarter delivery and shipment numbers, and once again, they were below the guidance. In addition, the outlook given in the press release for the last six months of the year points that the revenue and earnings projections will have to be lowered again, says a report from Forbes by Chuck Jones. Tesla shares were trading down 3% as the market prepared to open indicating investors don’t like this news.
More Model X delivered this quarter
For Tesla Motors Inc , the Street expects the June quarter revenue to be up 14% from the March quarter to $1.82 billion. It was possibly assuming the EV maker to hit its 17,000 unit guidance, but in the June quarter, the automaker delivered fewer cars at 14,370 – whereas in the March quarter, it delivered 14,810 cars (shortfall of 2,630 cars).
In the June quarter, there were 74% more Model X (4,625) making up 32% of the deliveries whereas in the March quarter, only 16% were Model X or 2,400. In the March quarter, Model S deliveries were 12,410 or 84% of the total, and they fell to 9,745 in the June quarter or 68%. Since the Model X has a higher price, the mix of Model X and S is important, and could lower the impact.
The number of cars in transit was higher than expected, mentioned the automaker in its press release. The May press release stated there would be a large number of cars in transit to Asia and Europe. “Tesla provided the number that were in-transit for the two quarters (5,150 vs. 2,615 last quarter) but did not specify how many more were in the pipeline than planned so don’t jump to the conclusion that when you add the difference of in-transit vehicles to deliveries that it would have almost made its delivery guidance,” said Jones.
Tesla EPS, revenue estimates need to be trimmed
Tesla Motors Inc does not have a very good track record when it comes to deliveries. In its press release, the EV maker said it should deliver around 50,000 cars in the second half of this year. This would put total deliveries just below the low-end of its guidance of 80,000 to 90,000 cars, at 79,180.
The consensus estimate could lower by $100 to $150 million of its $1.82 billion estimate. But, it will still be slightly above its $1.6 billion March quarter result, says Jones. The missed deliveries can have a bad impact on the analyst’s EPS projections as well.
The Street estimated the automaker to generate $1.31 in EPS, and this was before the carmaker released its March 2016 quarter preliminary numbers. This has fallen to $0.73 as of today, and will need to decrease further. It probably would not go all the way down to breakeven or a loss, but it would continue to fall later this year, says Jones.
This means the $3.33 for EPS of 2017 is also likely to decrease. It should be noted that both 2015’s and 2016’s EPS projections were above $3 at one point in time.