Tesla (TSLA) is about to release its second quarter 2018 results – here’s what to expect

Tesla (TSLA) is set to release its second quarter 2018 financial results on Wednesday, August 1 after market close. As usual, the release of the results will be followed by a conference call and Q&A with Tesla’s management at 2:30pm Pacific Time (5:30pm Eastern Time).

Here we take a look at what both the street and retail investors are expecting for the quarterly results.

Deliveries

As usual, Tesla’s vehicle deliveries drive most of its earning results since vehicle sales represent the automaker’s main revenue stream at the moment.

Tesla already confirmed its second quarter 2018 deliveries: 40,740 vehicles – a new record for the company thanks to the Model 3 production ramp starting to produce decent numbers.

The delivery breakdown for the quarter was:

• 18,440 Model 3’s
• 10,930 Model S vehicles
• 11,370 Model X SUVs.

Those numbers are adjusted slightly during the release of the earnings.

Additionally, Tesla has a high number of vehicles currently in transit: 11,166 Model 3 vehicles and 3,892 Model S and X vehicles were heading to customers at the end of Q2.

Here are Tesla quarterly global deliveries of all current vehicles in production since their launches:

Revenue

Wall Street’s revenue consensus is $3.791 billion for the quarter and Estimize, the financial estimate crowdsourcing website, predicts almost $100 million more: $3.886 billion in revenue.

They are predicting a significant increase of $400 million from the last quarter (Q1 2018) and an even more significant increase over the $2.790 billion that they brought over the same period last year (Q2 2017).

The predictions for Tesla’s revenue over the past two years – Estimize predictions in blue – Wall Street consensus in grey – Actual results in green:

The increase is not surprising considering the record Model 3 deliveries and the still strong Model S and Model X deliveries.

Tesla’s energy division could still surprise us and make a difference, but that remains to be seen.

Earnings

Earnings per share, or rather loss per share, is expected to plunge again for the quarter.

Like for its revenue, the expectations are again close for both the street and retail investors. The Wall Street consensus is a loss of $2.71 per share for the quarter, while Estimize’s prediction is a loss of $2.73 per share.

Earnings per share over the last two years – Estimize predictions in blue – Wall Street consensus in grey – Actual results in green:

Tesla has invested for the production of 5,000 Model 3s per week and every time it doesn’t reach that, it is going to take a hard hit on the earnings.

The situation improved a lot over the last quarter and Tesla even reportedly hit its goal during the last week, but they were still producing Model 3 vehicles at an important loss throughout the quarter.

Yet, the street expects a significantly smaller loss than last quarter.

Other expectations for the shareholders letter and analyst call

Obviously, we expect that a fair amount of the conference call and shareholders letter will revolve around Model 3 production and how it has evolved recently.

We should have a clearer path to Tesla’s ultimate goal of 10,000 units per week.

Investors will also be looking for an update on Musk’s prediction that Tesla will be cash flow positive by the end of the year.

While profitability is mainly based on the Model 3 program, Tesla has also taken several other steps to cut costs, including an important restructuring that includes laying off about 9% of its workforce.

We did share Musk’s email announcing the restructuring, but further comments from the CEO would certainly be appreciated by investors.

That’s for cost reductions, but investors will also be interested to know where Tesla will find the money to build the recently announced Gigafactory 3 in China.

As for Tesla Energy news, I expect that solar deployment will still be slow, but like the last quarter, it could still be an interesting quarter on the energy storage front.

Join us on Electrek on Wednesday after market close for our report on the results and shareholders letter. You can stick around after for the conference call with management at 2:30pm Pacific Time (5:30pm Eastern Time) and you can join on the call through Tesla’s investor relations website.