Entering text into the input field will update the search result below

A Quick Look At Tesla's Q4 Earnings

Jan. 28, 2019 11:48 AM ETTesla, Inc. (TSLA)12 Comments
CoverDrive profile picture
CoverDrive's Blog
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.


  • Tesla (TSLA) SG&A will continue to show no company growth.
  • A second quarter of GAAP profit is likely.
  • Anticipate earnings slightly lower than analyst's consensus.

Tesla (TSLA) will announce Q4 earnings on Wednesday. 

Here’s a summary of what I expect to see. As always, I start with the Q3 earnings and make adjustments from there. Most of the adjustments are based on comments made in the Q3 Update Letter.

I spent some time estimating the Average Sales Prices. They include both new inventory sales and custom order. These are lower than Q3, mostly due to model mix. Revenue works out to $7B, slightly more than Q3. 

For Gross Margins, I started with Tesla’s “slightly lower” guidance. But I think margins were under further pressure as end-of-year orders were less than expected. I assume that automotive margins will be down 2%. The COGS are calculated from these GM’s.

Gross Profit calculates out to $1.4B, excluding ZEV credits. For a growing company that just doubled its sales in Q3, Operating Expenses should be up significantly. But Tesla guided that would “grow only slightly”. I used the same OpEx that was reported in Q2.

Based on this, Operating Income works out to a healthy $250M. Add to that some ZEV credit sales (a wild guess). Other adjustments should be similar to last quarter, except for a significant reduction in NCI adjustment.

The bottom line works out to a GAAP profit of $120M, ($0.67/shr). Analysts prefer non-GAAP, usually $1.00 higher. The analyst consensus is currently at $2.22. Last quarter, I was about $1.00 more optimistic than consensus. This quarter, I'm $0.55 more pessimistic.

Analyst's Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.