Tesla (NASDAQ:TSLA) is set to release its Q4 and Full Year 2018 financial results after markets close tomorrow, January 30. Following the release of its fourth-quarter and full-year financial results, the electric car maker is scheduled to hold its earnings call, which will begin at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time).
A lot is riding on Tesla’s results for the fourth quarter of 2018. To say that the past year has been challenging for the company is an understatement, with CEO Elon Musk describing the Model 3 ramp as one of the most difficult periods of his career. That said, despite a short-lived attempt at privatization, run-ins with the SEC, and clashes with mainstream media, Tesla surprised Wall Street on the third quarter when it posted a GAAP profit of $312 million. Since then, the company’s critics have been forced to change their narrative from “Tesla will never turn a profit” to “Tesla’s Q3 2018 results are as good as it ever will get.”
Elon Musk has proven to be quite conservative about Tesla’s fourth quarter results. In an email to employees earlier this month, Musk explained that Tesla’s third-quarter earnings were notably driven by a push to sell higher-priced variants of the Model 3 to North American customers. Musk noted that unaudited estimates point to Q4 2018 making a GAAP profit, though not as much as the third quarter.
With this in mind, here are a number of things to expect from tomorrow’s Q4 fourth-quarter and full-year 2018 financial results and earnings call.
Earnings
Analysts polled by FactSet have noted that they expect Tesla to report adjusted Q4 2018 earnings of $2.20 a share. This is a notable improvement over the fourth quarter of 2017, with its loss of $3.04 per share. GAAP earnings are expected to hit $1.23 a share, another notable turnaround from Q4 2017’s loss of $4.01. Estimize, a crowdsourced platform that aggregates estimates from analysts and other financial executives, notes that it expects Tesla to report an adjusted profit of $2.02 per share.
Revenue
FactSet surveys among analysts state that Tesla is expected to report revenue of $7.12 billion for Q4 2018, a notable improvement over the $3.29 billion from 2017’s fourth quarter. Estimize’s results are a bit more conservative at $7.03 billion.
Sustainability
If there is one thing that investors would be looking for in Tesla’s upcoming fourth-quarter and full-year 2018 financial report and earnings call, it would be the company’s capability to sustain its profitability. Tesla, for its part, has seemingly adopted contingencies to ensure this, from trimming its workforce by 7% to retiring the 75 kWh battery pack options for the Model S and X and concluding its long-running customer referral program.
Ultimately, if Tesla could successfully prove that its feat in the third quarter is sustainable, the company could definitively prove to investors that it would be profitable moving forward.
Product Roadmap
Tesla has a lot on its plate this 2019. The highly-anticipated Model Y SUV is expected to be unveiled sometime this year, and Elon Musk has teased that the Tesla pickup truck might be revealed as well. Apart from this, the company is aggressively ramping Solar Roof tiles production in Gigafactory 2. Lastly, Tesla is also expected to initiate the start of the Semi’s production, as announced during the vehicle’s unveiling.
Considering Tesla’s busy year, there is a good chance that Elon Musk and the company’s other executives would provide some updates on upcoming projects, such as the release of Hardware 3 and upcoming Autopilot features. Other pertinent updates for the company’s existing product lineup, such as a possible 2170 battery cell upgrade for the Model S and X, as well as the production of the $35,000 Model 3, might also be discussed.
As of writing, Tesla shares are trading at -0.82% at $293.95 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
