What to watch for in Tesla’s second quarter earnings on Wednesday

Electric car maker Tesla will report earnings on Wednesday afternoon after market close. This is the last quarter that Tesla has to focus solely on shipping the Model S, before it’s supposed to start delivering its next car the Model X, a crossover SUV, in the late third quarter of this year.

This year Tesla has been focused on continuing high volume shipments of its Model S cars to customers, as well as working on the car’s software updates and new auto drive features. Tesla also recently started offering new Model S options including a larger battery, a lower-priced version and the super fast acceleration called “Ludicrous mode.”

Tesla shipped a record number of Model S cars in the second quarter already, and in early July the company said it had delivered 11,507 cars, a 52% increase over the same quarter last year. Tesla shipped 10,030 cars in the first quarter of this year, and in total this year (as of early July) had moved 21,537 of its Model S cars. The company is trying to deliver 55,000 cars this year, two thirds more than it did in 2014.

Tesla won’t be able to meet its 2015 delivery goals without launching the Model X. Tesla has already delayed its Model X launch repeatedly, so if it’s going to be late, again, now is the time to let customers and Wall Street know.

Franz von Holzhausen

Beyond moving the Model S, Tesla has been spending — and borrowing — heavily to fund all of its other projects. Tesla is building a massive battery factory outside of Reno, it’s been building out tooling and production for its Model X car, it’s been designing its lower cost car the Model 3 (which Tesla will show off next year) and its been scaling up both its stores and its charging network.

Thanks to all of this spending, and because Tesla is a relatively young (a decade-old) company, it’s still not regularly profitable. Analysts are predicting an adjusted loss of 59 cents a share, and a net loss of $117 million for the quarter, which is greater than the $61.9 million loss a year earlier.

But thanks to the hearty growth of its Model S sales, Tesla is expected to grow its revenue for the second quarter to $1.17 billion. Tesla is also expected to break even in the third quarter of this year, and turn a profit by the end of the year.

During the earnings, Tesla could give more details on the timing of its gigafactory, which is supposed to start producing batteries by the end of 2016. The company could also discuss how its new grid battery product division is doing, considering Tesla has said it’s gotten a good deal of orders for batteries that can power homes and the grid. Will Tesla morph even more into an “energy company” beyond being mostly a car company?

Prinzo and Associates LLC is a tax firm located in Pittsburgh's South Hills. Since 1991 we have been helping clients with tax problems. We also help clients with retirement and other financial needs. If your business is in need of payroll, quickbooks or other financial assistance, we are here to help!

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