Teslas Earnings Smashed Forecasts Again Hello Samp;p 500
New York (CNN Business)Tesla shareholders take been spending a lot of time following CEO Elon Musk's grand play to buy Twitter. Come Wednesday dark they'll exist focused once more on a company he already controls — Tesla itself.
Tesla (TSLA) reports first quarter results after the bell Wednesday. Analysts have a fairly bullish outlook for the companies' results.
Tesla earnings are expected to jump 142% from a year ago. Other traditional automakers, such as General Motors (GM), Ford (F), Toyota (TM) and Volkswagen (VLKAF), are all expected to report a driblet in earnings — ranging from a 14% decline at VW to a 58% plunge at Ford — due to supply concatenation and production problems.
Merely how the visitor does in the first quarter isn't the biggest concern for Tesla shareholders. It's what lies ahead for the company. Here's a rundown of what to look for in its earnings study and call with investors.
Is Elon on the phone call?
9 months ago, Musk appear he would generally finish participating in the quarterly call, proverb it took too much of his fourth dimension. That lasted exactly one quarter.
By the time Tesla reported tape fourth quarter results in January, he was back on the call, though his comments appeared to do more to worry investors than assure them.
Now with concerns among some investors that Musk's attention is being diverted by his bid for Twitter (TWTR), will he be on the call over again? There are risks for the company either way.
"From a perception standpoint, if he's not on the phone call, it feeds into the thesis that he'south too busy with Twitter," said Dan Ives, tech analyst with Wedbush Securities. At the same fourth dimension, Musk can be a loose cannon on these calls.
During the early days of the pandemic in April 2020 he lashed out at stay-at-habitation orders in California that temporarily shut his main factory, calling them "fascist." If he makes similar comments about far more stringent lockdown rules now in place in much of Mainland china, he could anger Chinese authorities, who could make life very hard for Tesla in the world's largest market for electrical vehicles.
Chinese lockdowns
Speaking of which, investors will want to know what's the outlook for production in China in the face of those lockdown orders.
Tesla is reported to have reopened its plant in Shanghai this week, though the company has yet to confirm that. Investors will want to know if information technology can stay open, and what is going on with the factories of suppliers of critical parts, such as batteries.
"The principal focus of the earnings call must be effectually supply coming out of China," said Ives. "That'southward the biggest overhang for the stock right now. They've already lost about 50,000 cars of production and so far in the second quarter. The question is are they going to give whatever guidance?"
Bombardment development
Once upon a time, automakers lived and died past their internal combustion engines. Features such as fuel injection and measures such every bit horsepower were the keys to alluring buyers and getting tiptop dollars.
Now in the age of EVs, it'south batteries and a new set of performance measures: How far tin a car get on a single charge? How fast can information technology accuse? And how much volition it toll to build?
Tesla'south next generation battery is the 4680, which is expected to provide a breakthrough in both costs and the distance a vehicle can travel on a single charge. Tesla has only recently started using the battery in vehicles, and it is still just available in limited volumes.
The outlook for production of that battery, and the supply of chips and raw materials it needs to build them, is crucial for Tesla'due south plans to increment vehicle production.
New factories
Within the final five weeks, Tesla has started shipping cars from two new factories: one outside of Berlin and ane outside of Austin, Texas, where its headquarters is now based.
How fast it can ramp up product, especially with the supply chain problems caused by China's Covid lockdowns, and to a bottom extent the war in Ukraine, is crucially important if the visitor is to hit its growth targets for the year.
Beyond that, investors will probably be looking for more on the new products set to exist congenital in Austin, namely the Cybertruck pickup and Tesla's Semi truck. No significant production of either is expected earlier 2023 at the primeval, but it will be a bad sign if they are pushed back even further, particularly with Ford and GM fix to curl out their own electric trucks before long. The Ford 150 Lightning is due in showrooms this bound. The Silverado EV is due out next spring.
Tesla's marketplace cap is more than the combined value of the 12 largest automakers on the planet not because it is so much more profitable, simply because of its growth projections. If it can't stick to its meliorate than 50% annual growth path, the company's stock could take a tumble.
What volition information technology mean for Tesla if Musk buys Twitter?
Finally, if Musk is on the call it will be particularly interesting to run into if he makes any comments about his efforts to buy Twitter. And so far his comments take been in wide strokes, not details.
And he hasn't said annihilation about whether he plans to exist involved in the day-to-day direction of Twitter.
"There are worries about Musk, at a time he should exist so focused on Tesla, how can he juggle so many balls?" said Ives.
Musk also hasn't disclosed how he volition finance his bid to buy the additional shares, which could cost in the neighborhood of $40 billion. Will he have to sell some of his Tesla stake to come up up with the cash? If and so, that would probable put downward pressure on Tesla'south share price.
Source: https://www.cnn.com/2022/04/20/investing/tesla-earnings-preview/index.html