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Forecasting Tesla's Q3 Performance: $6.99B In Revenue, $85M In Operating Profit

Aug. 02, 2018 1:12 PM ETTesla, Inc. (TSLA)144 Comments
Marginal Analysis profile picture
Marginal Analysis


  • On Tuesday, I took a look at estimating the upcoming Q2 earnings and exploring what Q3 might look like.
  • Today, I start by comparing where things matched up and where they went wide.
  • I then use new information from today's earnings calls to make an early forecast for the Q3 figures.

Tuesday, I took a look at what Q2 earnings might look like and what the important drivers of profitability would be. My top-line and bottom-line figures were $4.15B and -$718M (losses before tax) vs. Tesla's actual figures today of $4.02B and -$728M respectively. A quick run-down of where things matched up and where they were off:

Q2 ($K) Actual ($K)
Auto Revenue $3,192,407 $3,117,865
Costs $2,636,330 $2,529,739
Margin 17.42% 18.86%
Gross profit $556,077 $588,126
Lease Revenue $182,108 $239,816
Costs $113,456 $136,915
Margin 37.70% 43.00%
Gross Profit $68,652 $102,901
Energy Revenue $487,053 $374,408
Costs $436,142 $330,273
Margin 10.45% 11.79%
Gross Profit $50,911 $44,135
Services Revenue $289,753 $270,142
Costs $431,667 $386,374
Margin -48.98% -43.03%
Gross Profit -$141,914 -$116,232
Total revenue $4,151,321 $4,002,231
Costs $3,617,595 $3,383,301
Gross Margin 12.86% 15.46%
Gross Profit $533,725 $618,930
R&D 367096 $386,129
SG&A $703,564 $854,193
Total OPEX $1,070,660 $1,240,322
Operations profit (loss) -$536,935 -$621,392
Net interest and other expense -$182,048 -$107,607
Loss before taxes -$718,983 -$728,999

Bottom-line figure is probably as close as I'll ever hope to get. A slightly larger proportion of S/X units went to lease rather than sales, explaining the difference there. My Services revenue figures were more pessimistic than reality (this was somewhat intentional, as I was aiming for these to be conservative), while my SG&A costs (inclusive of restructuring charges) was unintentionally short of the real total. Unexpected other income for Tesla helped offset its operating losses being worse than anticipated.

Disaster averted, suspense preserved

Elon Musk appeared to earn himself major brownie points with analysts today just by politely answering the questions ask of him. No drama, no long-winded tangents by retail investors (softball questions were saved for the final 5 minutes of the call, thankfully). What a concept.

Tesla reiterated its assertion it will be profitable and

This article was written by

Marginal Analysis profile picture
Finance, marketing analytics, pricing optimization, and corporate strategy background across tech, energy, telecom, and industrial manufacturing.

Analyst’s Disclosure: I am/we are short TSLA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am/we are short via long-dated options, in conjunction with long positions as part of a straddle investment. Readers are discouraged from engaging in options and other more advanced positions unless they have significant investing experience with such investment strategies.

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