Tesla Investors Fret On Meeting Delivery Targets Ahead Of Q2

Fresh from the Model 3 delivery boost, Tesla Inc TSLA is scheduled to report its second-quarter results after the market close on Wednesday.

After running up to $335 ahead of the commencement of deliveries, the stock has cooled off and is trading well off its all-time closing high of $383.45 reached on June 23.

Whether Tesla can keep up with the production and delivery targets is the moot point, Victor Jones, director of international trading at TD Ameritrade told Benzinga.

Historical Performance, Analysts' Expectations

Analysts, on average, expect the investment-heavy Tesla to report a loss of $1.80 per share, narrower than last year's loss of $1.61. However, estimates vary widely between a loss of $0.33 to $1.80 per share.

In the past four quarters leading up to Q2, Tesla reported below-consensus bottom line results in three quarters, while it posted an unexpected profit in one quarter.

Gross margin for the first quarter was at 24.8 percent, up from 22 percent in the year-ago quarter.

Revenues are estimated to double to $2.55 billion. Notwithstanding the bottom line misses, the company has been more or less consistent in beating revenue targets.

The Significance Of Model 3

With the mass market Model 3 vehicle coming into the equation only in August, it isn't likely to figure in the company's second quarter results. This vehicle could eventually help the company achieve volumes, which could ultimately help it turn to black.

In its recent 10-K, the company said it plans to build 500,000 vehicles in 2018, which calls for heavy capital expenditure. The company estimated capital expenditure of more than $2 billion ahead of its Model 3 production.

"We expect that our current sources of liquidity together with our projection of cash flows from operating activities will provide us with adequate liquidity over at least the next 12 months," the company said in its 10-Q of its liquidity position.

"Tesla is going to be an interesting one. The questions will be how they see production and shipments through the end of the year. Elon Musk has talked about that s-curve in production, where they expect massive growth. But they've got 500,000 Model 3's on pre-order, so they've got to make good on those first," Jones said concerning the focus of investors.

"People are going to ask whether they're on track with their production and delivery through the end of the year."

Jones also pointed to the top-end battery Tesla is working on, while also stating that the company has to work on bringing out its lower tiered model battery by the end of the year as well.