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Will Q3 Deliveries Miss Snap Tesla's (TSLA) Earnings Beat Streak?
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Tesla (TSLA - Free Report) is set to release third-quarter 2022 results on Oct 19, after the closing bell. The electric vehicle (EV) manufacturer’s upcoming results will reflect the impact of weaker-than-expected deliveries during the quarter under discussion. However, rising average prices of vehicles are likely to offset the impact of delivery miss.
In the last reported quarter, Tesla reported earnings of 76 cents a share, which surpassed the Zacks Consensus Estimate of 61 cents. This marked the sixth straight earnings beat for the company. Higher-than-expected revenues from the Services and Other segment resulted in this outperformance. The bottom line also compared favorably with the year-ago earnings of 48 cents a share. Total revenues came in at $16,934 million, lagging the consensus mark of $17,101 million. The top line, however, witnessed year-over-year growth of 41.6%.
Production and delivery totaled 258,580 and 254,695 vehicles for second-quarter 2022, reflecting a year-over-year jump of 25% and 27%, respectively. Model 3/Y registered production and deliveries of 242,169 and 238,533 vehicles, marking year-over-year growth of 19% and 20%, respectively. Production and delivery of the Model S/X totaled 16,411 and 16,162 units, respectively, in the quarter under review.
Tesla had cash/cash equivalents and long-term debt and finance leases of $18,324 million and $2,898 million, respectively, as of Jun 30, 2022. The firm generated a free cash flow of $621 million during second-quarter 2022.
TSLA Hits Record Q3 Deliveries But Misses Projections
Third-quarter deliveries totaled 343,830 units, up 42% from the year-ago quarter and 35% from the prior quarter. It also topped the first-quarter record of 310,048 units. However, the number is well below analysts’ expectation of 350,000-370,000 deliveries. Supply chain snafus and logistics challenges were the primary causes of the delivery miss. As cited by Tesla in its press release “As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks.” The total deliveries also missed the Zacks Consensus Estimate of 354,950 units. Our estimates for total deliveries were 349,931 units.
Tesla delivered 325,158 Model 3/Y units during the quarter under discussion, lagging the consensus mark of 339,982 units. We had projected Model 3/Y deliveries of 331,578 vehicles for the third quarter of 2022. As for Model S/X, 18,672 units were delivered in the third quarter of 2022, surpassing the Zacks Consensus Estimate of 14,968. Our estimates stood at 18,353 units.
Notably, Tesla delivered 83,135 EVs last month in China, per the China Passenger Car Association, representing an 8% increase from August sales volumes. September sales units marked a new record for Tesla’s Shanghai factory since December 2019, topping the previous sales record of 78,906 units. The increase is the result of the Shanghai factory upgrade undertaken by TSLA. Nonetheless, the figure trailed the 100,000 vehicle deliveries mark that analysts had forecast Tesla would deliver in China during September.
In addition to lower-than-anticipated total deliveries in the third quarter of 2022, high costs of raw materials and logistical constraints are expected to have weighed on margins. However, Tesla is likely to have benefited from the rise in average selling price (ASP). Impact of lower-than-estimated deliveries are likely to have been offset by high ASP. The Zacks Consensus Estimate for total automotive gross profit for the third quarter of 2022 is pegged at $5,857 million, implying growth from $4,081 million and $3,673 million recorded in the second quarter of 2022 and the third quarter of 2021, respectively.
Overall Earnings & Revenue Projections for Q3
Our proven model does not conclusively predict an earnings beat for Tesla as it doesn’t have the right combination of a positive Earnings ESP and a favorable Zacks Rank. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 95 cents per share, indicating an increase of 53.2% on a year-over-year basis. The Zacks Consensus Estimate of $22.28 billion for sales indicates a 62% rise on a year-over-year basis.
Stocks With the Favorable Combination
Here are a few players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Genuine Parts Company (GPC - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #3. The stock is slated to report third-quarter 2022 earnings on Oct 20.
The Zacks Consensus Estimate for Genuine Parts’ to-be-reported quarter’s earnings and revenues is pegged at $2.03 per share and $5.39 billion, respectively. Encouragingly, GPC surpassed earnings estimates in the last four quarters, with the average surprise being 11%.
Polaris Inc. (PII - Free Report) has an Earnings ESP of +0.26% and a Zacks Rank #3. The stock is slated to report third-quarter 2022 earnings on Oct 25.
The Zacks Consensus Estimate for Polaris’ to-be-reported quarter’s earnings and revenues is pegged at $2.85 per share and $2.19 billion, respectively. PII surpassed earnings estimates in three out of the last four quarters and missed once, with the average negative surprise being 1%.
PACCAR Inc. (PCAR - Free Report) has an Earnings ESP of +1.97% and a Zacks Rank #3. The stock is slated to report third-quarter 2022 earnings on Oct 25.
The Zacks Consensus Estimate for PACCAR’s to-be-reported quarter’s earnings and revenues is pegged at $2 per share and $6.75 billion, respectively. PCAR surpassed earnings estimates in three out of the last four quarters and missed once, with the average surprise being 7.4%.
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Will Q3 Deliveries Miss Snap Tesla's (TSLA) Earnings Beat Streak?
Tesla (TSLA - Free Report) is set to release third-quarter 2022 results on Oct 19, after the closing bell. The electric vehicle (EV) manufacturer’s upcoming results will reflect the impact of weaker-than-expected deliveries during the quarter under discussion. However, rising average prices of vehicles are likely to offset the impact of delivery miss.
(Also read: Here's How Tesla is Placed Ahead of Its Q3 Earnings)
Q2 Highlights
In the last reported quarter, Tesla reported earnings of 76 cents a share, which surpassed the Zacks Consensus Estimate of 61 cents. This marked the sixth straight earnings beat for the company. Higher-than-expected revenues from the Services and Other segment resulted in this outperformance. The bottom line also compared favorably with the year-ago earnings of 48 cents a share. Total revenues came in at $16,934 million, lagging the consensus mark of $17,101 million. The top line, however, witnessed year-over-year growth of 41.6%.
Production and delivery totaled 258,580 and 254,695 vehicles for second-quarter 2022, reflecting a year-over-year jump of 25% and 27%, respectively. Model 3/Y registered production and deliveries of 242,169 and 238,533 vehicles, marking year-over-year growth of 19% and 20%, respectively. Production and delivery of the Model S/X totaled 16,411 and 16,162 units, respectively, in the quarter under review.
Tesla had cash/cash equivalents and long-term debt and finance leases of $18,324 million and $2,898 million, respectively, as of Jun 30, 2022. The firm generated a free cash flow of $621 million during second-quarter 2022.
TSLA Hits Record Q3 Deliveries But Misses Projections
Third-quarter deliveries totaled 343,830 units, up 42% from the year-ago quarter and 35% from the prior quarter. It also topped the first-quarter record of 310,048 units. However, the number is well below analysts’ expectation of 350,000-370,000 deliveries. Supply chain snafus and logistics challenges were the primary causes of the delivery miss. As cited by Tesla in its press release “As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks.” The total deliveries also missed the Zacks Consensus Estimate of 354,950 units. Our estimates for total deliveries were 349,931 units.
Tesla delivered 325,158 Model 3/Y units during the quarter under discussion, lagging the consensus mark of 339,982 units. We had projected Model 3/Y deliveries of 331,578 vehicles for the third quarter of 2022. As for Model S/X, 18,672 units were delivered in the third quarter of 2022, surpassing the Zacks Consensus Estimate of 14,968. Our estimates stood at 18,353 units.
Notably, Tesla delivered 83,135 EVs last month in China, per the China Passenger Car Association, representing an 8% increase from August sales volumes. September sales units marked a new record for Tesla’s Shanghai factory since December 2019, topping the previous sales record of 78,906 units. The increase is the result of the Shanghai factory upgrade undertaken by TSLA. Nonetheless, the figure trailed the 100,000 vehicle deliveries mark that analysts had forecast Tesla would deliver in China during September.
In addition to lower-than-anticipated total deliveries in the third quarter of 2022, high costs of raw materials and logistical constraints are expected to have weighed on margins. However, Tesla is likely to have benefited from the rise in average selling price (ASP). Impact of lower-than-estimated deliveries are likely to have been offset by high ASP. The Zacks Consensus Estimate for total automotive gross profit for the third quarter of 2022 is pegged at $5,857 million, implying growth from $4,081 million and $3,673 million recorded in the second quarter of 2022 and the third quarter of 2021, respectively.
Overall Earnings & Revenue Projections for Q3
Our proven model does not conclusively predict an earnings beat for Tesla as it doesn’t have the right combination of a positive Earnings ESP and a favorable Zacks Rank. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company has an Earnings ESP of -0.04% and Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 95 cents per share, indicating an increase of 53.2% on a year-over-year basis. The Zacks Consensus Estimate of $22.28 billion for sales indicates a 62% rise on a year-over-year basis.
Stocks With the Favorable Combination
Here are a few players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Genuine Parts Company (GPC - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #3. The stock is slated to report third-quarter 2022 earnings on Oct 20.
The Zacks Consensus Estimate for Genuine Parts’ to-be-reported quarter’s earnings and revenues is pegged at $2.03 per share and $5.39 billion, respectively. Encouragingly, GPC surpassed earnings estimates in the last four quarters, with the average surprise being 11%.
Polaris Inc. (PII - Free Report) has an Earnings ESP of +0.26% and a Zacks Rank #3. The stock is slated to report third-quarter 2022 earnings on Oct 25.
The Zacks Consensus Estimate for Polaris’ to-be-reported quarter’s earnings and revenues is pegged at $2.85 per share and $2.19 billion, respectively. PII surpassed earnings estimates in three out of the last four quarters and missed once, with the average negative surprise being 1%.
PACCAR Inc. (PCAR - Free Report) has an Earnings ESP of +1.97% and a Zacks Rank #3. The stock is slated to report third-quarter 2022 earnings on Oct 25.
The Zacks Consensus Estimate for PACCAR’s to-be-reported quarter’s earnings and revenues is pegged at $2 per share and $6.75 billion, respectively. PCAR surpassed earnings estimates in three out of the last four quarters and missed once, with the average surprise being 7.4%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.