Tesla Analyst Predicts 6% Beat On Q2 EPS — But Tells Investors To Focus On 4 'More Important' Things

With less than a week remaining until Tesla, Inc.’s TSLA second-quarter earnings report, an analyst has provided his estimates for the company.

Breaking It Down: Gary Black, co-founder and managing partner of Future Fund, predicts that Tesla’s adjusted earnings per share for the second quarter will be around $0.87. This figure is higher than the previous quarter’s $0.85 and the year-ago quarter’s $0.76. The consensus estimate stands at $0.82 per share.

See Also: Everything You Need To Know About Tesla Stock

Black’s estimates are based on the following assumptions:

• Auto gross margin, excluding regulatory credits, of 18%, compared to 19% in the first quarter and 26.2% in the same period last year. The Wall Street forecast is 18.2%.
• Regulatory credits of $340 million, down from $521 million in the first quarter.
• Auto average selling price, excluding regulatory credits, of $45,000, a decrease from $46,000 in the first quarter and $56,000 in the year-ago quarter.
• Energy revenue of $1.9 billion, resulting in a profit of $289 million with a 15% gross margin.
• A 2.5% year-over-year increase in research and development (R&D) expenses and a 3.9% increase in selling, general, and administrative (SG&A) expenses.

Focus Items: According to Black, management commentary on several key aspects will be more important than the adjusted earnings per share.

These include the fiscal year 2023 deliveries guidance, the trajectory of the auto gross margin (excluding credits), the timing of the first Cybertruck deliveries, and the recognition of deferred revenue from full-self driving.

The Wall Street estimate predicts Tesla’s revenue to be $24.57 billion, marking a 45.10% increase from the $16.93 billion reported a year ago and a 5.3% increase from the previous quarter’s $23.33 billion.

Worry Factors: Investor concern revolves around the impact on margins due to significant discounts offered by Tesla on its new inventory vehicles across different regions. However, vehicle prices stabilized in the second quarter after substantial reductions announced earlier in the year.

Q2 Call In Focus: Tesla is scheduled to release its earnings report on July 19 after the market close, followed by an earnings call where CEO Elon Musk and the management team will provide commentary and answer questions from shareholders and analysts.

Price Action: Tesla closed Thursday's session up 2.17% at $277.90, according to Benzinga Pro data.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

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