Tesla Inc will release its earnings numbers for the three months through June on Wednesday after the market closes. The hotly anticipated report comes right after the launch of the firm’s mass market Model 3. Right now that’s just about the only thing Wall Street is interested in.
Tesla, as is almost always the case, is expected to show a loss for the three months. The question really is, how much did the firm lose? The most important number in the minds of analysts and investors won’t be sales or earnings, however. The amount of cash that it has on hand is key to its survival.
Tesla earnings live
16:31 EDT: That’s us for now. Tesla will have its call at 17:30 EDT. You can find the link to the investor relations site further down on the bottom of this page.
16:30 EDT: Free cash flow in total was down 1.16 billion. It’s a big cash burn, but some were predicting a whole lot worse.
16:29 EDT: Tesla is also forecasting a rise in sales of the Model X and Model S in the second half of the year. Thats something analysts are still going to be worried about.
16:28 EDT: What Musk has done here, really is limited the downside. He still has time on the cash burn, and that’s the most important thing.
16:27 EDT: This is impressive all around from Tesla. Stock is up less than 3 percent now. A lot of shortss trying to cover may have driven the 4 percent pop earlier.
16:24 EDT: Digging into the report, the firm says it’s going to be margin positive on the model 3 by the end of the year. It’s going to “target” 25 percent in 2018.
16:19 EDT: Musk still has about $3 billion in cash on hand. Thats a solid number.
16:18 EDT: Firm says 1,500 Model 3s coming in the third quarter.
16:16 EDT: Loss number just 1.33. that’s a big win for Tesla!
16:14 EDT: Revenue at 2.79 billion. That’s way ahead of expectations.
16:14 EDT: Scratch that. Tesla stock is now up 3 percent in the after market.
16:12 EDT: Tesla is now down about 0.8 percent post market. Worth keeping an eye on that move.
16:11 EDT: Depending on the cash number, this could be a big move for Tesla. That’s definitely more of a downside risk.
16:09 EDT: Something to watch out for post earnings for sure!
Will be live on @BloombergTV at 10 after the hour, talking Tesla.
— E.W. Niedermeyer (@Tweetermeyer) August 2, 2017
16:08 EDT: Tesla investors tend to look on the bright side, so don’t be surprised if there’s a pop even if the headline looks bad. Gross margin is a place the firm could shine.
16:07 EDT: For those looking for tech trade ideas, this is an earnings report so there aren’t any. Still a lot of people on Twitter who have the perfect strategy though.
16:06 EDT: The Tesla call isn’t until 17:30 EDT, so don’t expect earnings to show up to soon, but then again you never know with Elon Musk.
16:04 EDT: Remember we’re looking for a big loss today, so don’t be surprised if Twitter goes crazy. $1.83 is the number to beat.
16:01 EDT: Tesla stock closed up about 1.98 percent today. That’s a big gain into risky earnings.
16:00 EDT: The market is now closed. Earnings could release any minute now. There’s a good chance we’ll be waiting somewhere between 30-90 mins.
What to expect from Tesla earnings
By consensus Wall Street is expecting Tesla Inc to show a loss of $1.83 per share. That’s a heavier burden than the $1.06 loss it took in the same three months of last year.
Revenue is expected to come in at $2.51 billion. In the same three months of last year, the firm had sales of $1.56 billion.
Cash burn is key for Tesla stock
Here’s the really central number. At the end of the first quarter Elon Musk and CFO Deepak Ahuja reported that their firm had about $4 billion in cash on hand. Meanwhile the firm had managed to burn more than $600 million in cash in the first quarter.
The second quarter is expected to have been rougher because of the Model 3 build out. Predictions put first quarter cash burn above the $1 billion mark. It’s hard to know what Wall Street will be satisfied with, however. Tesla stock has taken quite a beating in recent weeks after Model S sales shuddered. It’s not clear how much further the firm can fall while remaining the realm of “normal.”
That’s the key for Tesla Inc . The firm needs to be able to get its hands on enough money to be able to complete its greatest projects. As the Model 3 isn’t set for mass production until the end of the year, if then, it may need to go to investors for more cash.
Because that will wither increase debt or dilute Tesla stock, investors should be concerned. Tesla will host a conference call to discuss earnings at 5:30 PM EDT on Tuesday. We don’t know when the earnings numbers are set to arrive, but it will be before that time. The results will likely first appear here, on the firm’s investor relations page.