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Deliveries to Play a Key Part in Tesla's Q3

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Earnings season has finally arrived, and investors are eager for companies to finally pull back the curtain and reveal what has happened behind the scenes.

A poster child for growth stocks, Tesla (TSLA - Free Report) , is set to release quarterly results after the trading session on October 19th.

We’re all familiar with Tesla, which has revolutionized the EV (electric vehicle) industry. Currently, the company carries a Zacks Rank #3 (Hold) paired with an overall VGM Score of an A.

How does everything else shape up for the EV titan heading into the print? Let’s take a closer look.

Total EV Production & Deliveries

First of all, Tesla’s total EV production and deliveries for the quarter will be closely monitored, determining how the entire earnings report unfolds.

It's an absolutely vital metric because, of course, it shows how many EVs Tesla has been able to produce and place in the hands of customers.

Tesla states that over 365,000 vehicles were produced for the quarter, with 343,000 deliveries.

On the surface level, this would be fantastic, representing quarterly records. Further, total deliveries for Q3 reflect a stellar 42% Y/Y uptick and a 35% sequential uptick.

However, analysts were looking for deliveries around the 350,000 – 370,000 range, and the Zacks Consensus Estimate for total vehicle production stands at roughly 378,000. 

Tesla’s Model 3/Y is the company’s most successful EV, accounting for most of its sales. For the quarter, Tesla produced approximately 346,000 Model 3/Y EVs and delivered roughly 325,000 of those.

How does that compare with estimates?

For the quarter, the Zacks Consensus Estimate for total Model 3/Y deliveries sits at 339,000, with overall production pegged at 365,000.

In a press release, Tesla shined a brighter light on the company’s recent logistic struggles, stating, “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.”

Quarterly Estimates

Analysts have had mixed reactions to the quarter to be reported over the last several months, with five negative and five downwards earnings estimate revisions hitting the tape. Still, the Zacks Consensus EPS Estimate of $0.95 suggests a stellar 53% Y/Y uptick in earnings.

Zacks Investment Research
Image Source: Zacks Investment Research

The company’s top-line is also in exceptional health; the Zacks Consensus Sales Estimate of $22.3 billion reflects a 62% Y/Y uptick in quarterly revenue.

Quarterly Performance

TSLA has a strong earnings track record, exceeding the Zacks Consensus EPS Estimate by double-digit percentages in each of its last six reports. Just in its latest print, the EV titan penciled in a rock-solid 24.5% EPS beat.

Revenue results have also been robust; TSLA has exceeded the Zacks Consensus Sales Estimate in nine of its last ten quarterly reports. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

A focal point of the company’s earnings release will be centered around its vehicle production and deliveries.

Tesla looks to break previous production and delivery records, which is undoubtedly a major positive. Still, numbers released by the company are short of estimates.

However, the Y/Y comps are still stellar, telling us that EV demand has continued to increase. Supply chain issues have been a driving factor behind the recently less-than-expected delivery and production numbers.

Year-to-date, Tesla (TSLA - Free Report) shares have struggled to find their footing, down more than 37% and widely underperforming the S&P 500.

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