Tesla (TSLA) is about to publish its Q3 2016 financial results this week – here’s what to expect

Tesla (TSLA) is set to release its third quarter 2016 financial results on Wednesday, October 26 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). Now here’s what to expect on Wednesday:

It’s a particularly interesting earnings because Tesla generally releases its third quarter financial results during the first week of November, but earlier this month, the company announced that they will release the results a week early and just two days before the big ‘solar roof’ event planned for October 28.

What also makes this quarter interesting is that CEO Elon Musk commented about Tesla’s performance throughout the quarter, which is fairly rare. He referred to it as ‘likely the best quarter in Tesla history’ and said that Tesla could reach GAAP profitability, which would be a first in 3 years.

Deliveries

The company already confirmed having delivered a record number of vehicles during the quarter: 24,500. It was a 70% increase quarter-to-quarter and a more than 100% increase over the same period in 2015.Tesla updates deliveries when releasing the financial results, but the difference is generally less than 1%.

When releasing the delivery numbers earlier this month, the company reiterated its guidance of 50,000 vehicles during the second half of the year. Tesla exited the third quarter with a production rate of more than 2,000 vehicles per week and over 5,000 vehicles in transit.

Revenue

Of course, the surge in deliveries will inevitably create a surge in revenue. Wall Street’s revenue consensus is $2.43 billion for the quarter, while Estimize, the financial estimate crowdsourcing website, predicts $2.221 billion in revenue.

That’s up from $1.5 billion during the last quarter and $1.2 billion in Q3 2015.

The predictions for Tesla’s revenue over the past 2 years – Estimize predictions in blue – Wall Street consensus in grey – Actual results in green:

As you can see, predictions have been tracking very closely to the actual results when it comes to revenue.

Earnings

It’s another thing for earnings per share, or rather loss per share, but Elon Musk gave investors hope that it could be in the black this quarter.

The Wall Street consensus is a slight gain of $0.02 per share for the quarter, while Estimize’s prediction is actually a small loss of $0.04 per share.

Earnings per share over the last 2 years – Estimize predictions in blue – Wall Street consensus in grey – Actual results in green:

Tesla will only report its GAAP financial results this quarter now that it discontinued ‘Resale Value Guarantee’ program for new vehicles. Additionally, if Tesla indeed achieved profitability during the quarter, it will be interesting to see how the ZEV credits contributed.

Other expectations for the shareholders letter and analyst call

Alongside financial data, shareholders are also expecting several updates regarding recent news, especially about progress on the production plans for the Model 3 and the number of reservations to date:

• Tesla releases new ‘master plan’ to double the size of the Fremont factory to support Model 3 production
• Elon Musk says first 12 months of Tesla Model 3 production are ‘sold out’, what does it mean for the federal tax credit?

The upcoming vote on the merger with SolarCity is also likely to come up again now that the companies set a date for the vote and they will hold a joint event on Friday:

• Tesla (TSLA) and SolarCity (SCTY) to hold special shareholders meeting on November 17 to vote on the merger
• Tesla aims to unveil ‘Solar Roof’, next gen Powerwall and new Tesla charger on October 28

Again, Tesla will release the results after market close on Wednesday, October 26, 2016 and management will hold a conference call with Q&A at 2:30pm Pacific Time (5:30pm Eastern Time). You can join on the call through Tesla’s investor relations website.