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Will Tesla (TSLA) Report a Loss Again in Q2 Earnings?
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Tesla Motors, Inc. (TSLA - Free Report) is set to report second-quarter 2016 results on Aug 3. In the last quarter, this electric carmaker had posted a negative earnings surprise of 58.97%. Let us see how things are shaping up for this announcement.
Factors Influencing this Quarter
Tesla is actively working to boost production to meet the rising demand. Production volume surged to 18,345 vehicles in the second quarter of 2016 from 15,510 vehicles in the first quarter. Attractive products, rapid international expansion and improving production capacity are helping boost the company’s sales.
As a result, Tesla delivered 14,370 vehicles in the second quarter of 2016, which is significantly lower than its projection of 17,000 vehicle deliveries but higher than 11,532 cars delivered in the second quarter of 2015. This should lead to significant revenue growth. The addition of revenues from the Tesla Energy business, launched in Apr 2015, should also aid the top line in the quarter to be reported.
However, despite increasing sales, Tesla remains a loss-making company due to high expenses. The company is expected to report losses in the second quarter of 2016 as well.
Moreover, operating expenses in the second quarter are expected to increase marginally from the first quarter, as the company develops the customer support infrastructure and also focuses on expense management.
Our proven model does not conclusively show that Tesla is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Tesla has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of $1.15.
Zacks Rank: Tesla carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Westport Fuel Systems Inc. (WPRT - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Aug 3.
Magna International Inc. (MGA - Free Report) has an Earnings ESP of +0.75% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Aug 5.
Cooper Tire & Rubber Co. has an Earnings ESP of +7.48% and a Zacks Rank #3. The company’s second-quarter 2016 results are expected to release on Aug 4.
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Will Tesla (TSLA) Report a Loss Again in Q2 Earnings?
Tesla Motors, Inc. (TSLA - Free Report) is set to report second-quarter 2016 results on Aug 3. In the last quarter, this electric carmaker had posted a negative earnings surprise of 58.97%. Let us see how things are shaping up for this announcement.
Factors Influencing this Quarter
Tesla is actively working to boost production to meet the rising demand. Production volume surged to 18,345 vehicles in the second quarter of 2016 from 15,510 vehicles in the first quarter. Attractive products, rapid international expansion and improving production capacity are helping boost the company’s sales.
As a result, Tesla delivered 14,370 vehicles in the second quarter of 2016, which is significantly lower than its projection of 17,000 vehicle deliveries but higher than 11,532 cars delivered in the second quarter of 2015. This should lead to significant revenue growth. The addition of revenues from the Tesla Energy business, launched in Apr 2015, should also aid the top line in the quarter to be reported.
However, despite increasing sales, Tesla remains a loss-making company due to high expenses. The company is expected to report losses in the second quarter of 2016 as well.
Moreover, operating expenses in the second quarter are expected to increase marginally from the first quarter, as the company develops the customer support infrastructure and also focuses on expense management.
TESLA MOTORS Price and EPS Surprise
TESLA MOTORS Price and EPS Surprise | TESLA MOTORS Quote
Earnings Whispers
Our proven model does not conclusively show that Tesla is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Tesla has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of $1.15.
Zacks Rank: Tesla carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Westport Fuel Systems Inc. (WPRT - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Aug 3.
Magna International Inc. (MGA - Free Report) has an Earnings ESP of +0.75% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Aug 5.
Cooper Tire & Rubber Co. has an Earnings ESP of +7.48% and a Zacks Rank #3. The company’s second-quarter 2016 results are expected to release on Aug 4.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>