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Tesla earnings forecast and expectations for the fourth quarter



  • Tesla had a strong quarter in 2018 – the fourth quarter should also be profitable, but weaker than the previous financial period.
  • It will be interesting to see if quarterly revenues continue to improve significantly – the Tesla Topline was nearly $ 7 billion in the third quarter.
  • The more complicated questions for Tesla relate to how they will meet their capital needs in 2019.

Tesla reports Wednesday after the Bell for the fourth quarter and full year of 2018.

After Tesla had released a third quarter of nearly $ 7 billion in revenue and a much bigger than expected profit, it should Tesla pull back in the fourth quarter.

But I already have complicated things. Essentially, there are two things you know before the company reveals the numbers, and CEO Elon Musk talks to Wall Street analysts and tries to better hide his barely disguised (and possibly justified) contempt:

  1. Tesla becomes one achieve quarterly profit.
  2. It will not be as big a profit as in Q4.

That was & # 39; s! That's all you need to know! There is nothing to see here!

Yes, if Tesla can make a profit in the fourth quarter ̵

1; something on the order of $ 1 per share versus nearly $ 3 per share in Q3 -> 18 – this will be the company's first positive positive result. Given the massive losses in the first half of 2018, a full-year profit would be nearly impossible.

Read More: Elon Musk was right – Wall Street turns Tesla upside down and is boring

I'll concentrate more on revenue, resulting in a strong increase in deliveries in the third quarter of 2018 big jump made by Tesla's model 3 sedan. If Tesla can exceed the $ 7 billion mark in view of its sales targets for 2019, it is not out of the question that a $ 10 billion quarter will come before the end of the year.

Defense with a Keep It Simple analysis

A Tesla store.
Tesla vehicles stand in front of a showroom in Brooklyn, New York in August.

My "Keep it simple" analysis here, to be honest, is something of a defensive maneuver. Tesla exerted some pressure on earnings as early as 2019, and the stock is already reporting weaker results on the bottom line. They fell below $ 300 a few weeks ago when Musk raised profit warnings and the company announced layoffs. In January, the share slid by more than 12%.

This would create potential difficulties for a Tesla convertible tranche worth $ 920 million. The exchange price is about $ 360. Tesla has indicated that bondholders will be satisfied with a mix of cash and equity. Obviously, more money could come into the picture if first-quarter earnings do not push the stock closer to that $ 360 mark.

Soooo … there will certainly be a discussion about whether Tesla intends to raise capital by 2019, either through equity or by borrowing new debt. Then the question will turn to Tesla's balance sheet, where the company had $ 3 billion in cash at the end of the third quarter of 2018 (which is three times Tesla's remaining year).

Things get complicated here.

Yes, Tesla can sell new shares. At prices of less than $ 300, the investor will certainly want to buy them. I do not know why the company has not done that yet.

And yes, Tesla can put on new debts. The sale of 2017 junk bond bonds was carried out on more favorable terms than most high-yield borrowers could dream of – and raised $ 1.8 billion. I'm not sure why the company did not do that. Automakers have an insatiable appetite for capital and constantly spend debt. It will only be a problem if the sale is absolutely tank.

Finally, as in the past, Tesla may always issue some auto-lease-backed securities and may make additional deposits for new vehicles, such as: For example, the compact SUV model Y, which is likely to be unveiled this spring.

It's a problem to get enough money for the business, but it's a good problem. For Tesla, the alternative is to run a failed business that is not worth it. This is a bad problem, but not one of Musk & Co.'s got it.

As you can see, once we pass over what should be an encouraging, if less spectacular, Q4 earnings report, we may move to the more serious challenges of 2019 implementation. Tesla has not done such a good job in this regard 2018. The coming year needs to get better.


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