We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dismal Delivery Count to Limit Tesla's (TSLA) Q1 Earnings
Read MoreHide Full Article
Tesla (TSLA - Free Report) is set to release first-quarter 2024 results on Apr 23, after the closing bell. The results will primarily center around the company’s vehicle deliveries and profit margins. Weak first-quarter deliveries are expected to have been a spoiler.
Tesla surpassed earnings estimates in two of the trailing four quarters for as many misses, the average negative surprise being 0.40%. Before we delve into the factors that are set to shape its upcoming results, here’s a snapshot of its fourth-quarter 2023 earnings report.
The electric vehicle (EV) titan came up with disappointing fourth-quarter 2023 results, missing both earnings and revenue estimates. Fourth-quarter earnings per share of 71 cents fell short of the Zacks Consensus Estimate of 75 cents and also declined from the year-ago figure of $1.19. Total revenues of $25.17 billion also lagged the consensus mark of $25.94 billion but inched up 3% year over year.
Tesla’s fourth-quarter production totaled 494,989 units (476,777 Model 3/Y and 18,212 other models), up 13% year over year. The company delivered 484,507 vehicles, reflecting a year-over-year rise of 20%. The Model 3/Y registered deliveries of 461,538 vehicles, marking year-over-year growth of 19%. However, automotive gross margin came in at 18.8%, down from 25.9% reported in fourth-quarter 2022. Tesla’s operating margin declined 964 basis points year over year to 7.6%.
Tesla had cash/cash equivalents/investments of $29.1 billion as of Dec 31, 2023, compared with $22.2 billion on Dec 31, 2022. Long-term debt and finance leases, net of the current portion, totaled $2.8 billion, up from $1.6 billion as of Dec 31, 2022.
Diminishing Demand & Narrowing Margins to Hurt Q1 Results
Tesla reported 386,810 deliveries for the first quarter of 2024. The delivery numbers contracted 20.1% and 8.5% on a sequential and year-over-year basis, respectively. This was the first year-over-year decrease in quarterly deliveries since 2020. The drop was attributed to the early stages of the production ramp-up of its revamped Model 3 at the Fremont factory, as well as plant closures from shipping delays due to the Red Sea conflict and an arson attack at Gigafactory Berlin that caused a weeklong production halt at the German facility.
The deliveries missed our model projection of 439,292 units. Tesla’s models 3 and Y are the company’s most successful EVs, accounting for most of its sales. For the quarter, Tesla delivered 369,783 of those, lagging our forecast of 413,323 units.
Price reductions and incentives appear to have had a minimal effect on boosting sales but they might have put pressure on gross margins. High costs of raw materials and logistical constraints are expected to have an adverse impact on overall results. We project the cost of automotive sales to rise more than 8% year over year to around $16.6 billion. We expect gross profit from automotive sales to decline 7.9% year over year. Total automotive gross margin is projected at 18.6%, significantly down from 21.1% recorded in the year-ago period and 18.9% in the fourth quarter of 2023.
Overall Earnings & Revenue Projections
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 0.00% and carries a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 46 cents per share, indicating a contraction of 45.9% on a year-over-year basis. The consensus mark for EPS has moved south by a penny over the past seven days. The Zacks Consensus Estimate of $22.17 billion for sales indicates a 4.9% drop on a year-over-year basis.
Stocks With Favorable Combination
While an earnings beat looks uncertain for Tesla, here are a few players from the auto space that, per our model, have the correct ingredients to post an earnings beat this time.
The Zacks Consensus Estimate for GM’s to-be-reported quarter’s earnings and revenues is pegged at $2.06 per share and $40.61 billion, respectively. General Motors surpassed earnings estimates in each of the trailing four quarters, the average surprise being 19.95%.
PACCAR (PCAR - Free Report) will release first-quarter 2024 results on Apr 30. The company has an Earnings ESP of +0.33% and a Zacks Rank #2.
The Zacks Consensus Estimate for PCAR’s to-be-reported quarter’s earnings and revenues is pegged at $2.17 per share and $8.06 billion, respectively. PACCAR surpassed earnings estimates in the trailing four quarters, the average surprise being 17.07%.
American Axle (AXL - Free Report) will release first-quarter 2024 results on May 3. The company has an Earnings ESP of +674.43% and a Zacks Rank #3.
The Zacks Consensus Estimate for AXL’s to-be-reported quarter’s earnings and revenues is pegged at 1 cent per share and $1.52 billion, respectively. American Axle surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 0.52%.
Image: Shutterstock
Dismal Delivery Count to Limit Tesla's (TSLA) Q1 Earnings
Tesla (TSLA - Free Report) is set to release first-quarter 2024 results on Apr 23, after the closing bell. The results will primarily center around the company’s vehicle deliveries and profit margins. Weak first-quarter deliveries are expected to have been a spoiler.
Tesla surpassed earnings estimates in two of the trailing four quarters for as many misses, the average negative surprise being 0.40%. Before we delve into the factors that are set to shape its upcoming results, here’s a snapshot of its fourth-quarter 2023 earnings report.
(Also read: Tesla's Q1 Earnings Likely to Disappoint: Here's Why)
Q4 Highlights
The electric vehicle (EV) titan came up with disappointing fourth-quarter 2023 results, missing both earnings and revenue estimates. Fourth-quarter earnings per share of 71 cents fell short of the Zacks Consensus Estimate of 75 cents and also declined from the year-ago figure of $1.19. Total revenues of $25.17 billion also lagged the consensus mark of $25.94 billion but inched up 3% year over year.
Tesla’s fourth-quarter production totaled 494,989 units (476,777 Model 3/Y and 18,212 other models), up 13% year over year. The company delivered 484,507 vehicles, reflecting a year-over-year rise of 20%. The Model 3/Y registered deliveries of 461,538 vehicles, marking year-over-year growth of 19%. However, automotive gross margin came in at 18.8%, down from 25.9% reported in fourth-quarter 2022. Tesla’s operating margin declined 964 basis points year over year to 7.6%.
Tesla had cash/cash equivalents/investments of $29.1 billion as of Dec 31, 2023, compared with $22.2 billion on Dec 31, 2022. Long-term debt and finance leases, net of the current portion, totaled $2.8 billion, up from $1.6 billion as of Dec 31, 2022.
Diminishing Demand & Narrowing Margins to Hurt Q1 Results
Tesla reported 386,810 deliveries for the first quarter of 2024. The delivery numbers contracted 20.1% and 8.5% on a sequential and year-over-year basis, respectively. This was the first year-over-year decrease in quarterly deliveries since 2020. The drop was attributed to the early stages of the production ramp-up of its revamped Model 3 at the Fremont factory, as well as plant closures from shipping delays due to the Red Sea conflict and an arson attack at Gigafactory Berlin that caused a weeklong production halt at the German facility.
The deliveries missed our model projection of 439,292 units. Tesla’s models 3 and Y are the company’s most successful EVs, accounting for most of its sales. For the quarter, Tesla delivered 369,783 of those, lagging our forecast of 413,323 units.
Price reductions and incentives appear to have had a minimal effect on boosting sales but they might have put pressure on gross margins. High costs of raw materials and logistical constraints are expected to have an adverse impact on overall results. We project the cost of automotive sales to rise more than 8% year over year to around $16.6 billion. We expect gross profit from automotive sales to decline 7.9% year over year. Total automotive gross margin is projected at 18.6%, significantly down from 21.1% recorded in the year-ago period and 18.9% in the fourth quarter of 2023.
Overall Earnings & Revenue Projections
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 0.00% and carries a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 46 cents per share, indicating a contraction of 45.9% on a year-over-year basis. The consensus mark for EPS has moved south by a penny over the past seven days. The Zacks Consensus Estimate of $22.17 billion for sales indicates a 4.9% drop on a year-over-year basis.
Stocks With Favorable Combination
While an earnings beat looks uncertain for Tesla, here are a few players from the auto space that, per our model, have the correct ingredients to post an earnings beat this time.
General Motors (GM - Free Report) will release first-quarter 2024 results on Apr 23. The company has an Earnings ESP of +7.77% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GM’s to-be-reported quarter’s earnings and revenues is pegged at $2.06 per share and $40.61 billion, respectively. General Motors surpassed earnings estimates in each of the trailing four quarters, the average surprise being 19.95%.
PACCAR (PCAR - Free Report) will release first-quarter 2024 results on Apr 30. The company has an Earnings ESP of +0.33% and a Zacks Rank #2.
The Zacks Consensus Estimate for PCAR’s to-be-reported quarter’s earnings and revenues is pegged at $2.17 per share and $8.06 billion, respectively. PACCAR surpassed earnings estimates in the trailing four quarters, the average surprise being 17.07%.
American Axle (AXL - Free Report) will release first-quarter 2024 results on May 3. The company has an Earnings ESP of +674.43% and a Zacks Rank #3.
The Zacks Consensus Estimate for AXL’s to-be-reported quarter’s earnings and revenues is pegged at 1 cent per share and $1.52 billion, respectively. American Axle surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 0.52%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.