Tesla's Q3 Earnings Call: 10 Things To Look For

It’s hibernation time for Tesla Inc TSLA bears. CEO Elon Musk’s eagerness to release third-quarter earnings has inspired fresh optimism from even critics like Andrew Left.

Wednesday’s post-market report may win over even more.

Cox Automotive analyst Michelle Krebs is watching for the following in the Q3 update:

1. A Possible Profit

After losing $743 million in the second quarter, Tesla reiterated targets for third-quarter profitability. Krebs anticipates a possible break-even, near-profit or profit — the first since the third quarter of 2016.

2. Bottom-Line Relief

An analyst survey revealed expectations for a loss of less than 10 cents per share — far better than the $2.92 lost in last year’s Q3.

3. Potentially Record Revenue

A bottom-line boost would require a top-line triumph.

4. Model 3 Mayhem

Profitability requires a Model 3 ramp to between 50,000 and 55,000 units, with even more deliveries. Early reports showed production at 53,239 and deliveries at 55,840.

5. Cash Flow

Tesla guided for positive FCF in the back half of the year after a capital-intensive period of Model 3 ramping. Cash and cash equivalents fell from $3.4 billion in the fourth quarter to $2.2 billion in the second.

6. Model 3 Guidance

Given management’s production targets of 10,000 per week, Krebs anticipates fourth-quarter Model 3 delivery guidance in excess of 65,000 units.

7. China Plan

Tesla is making progress on its Shanghai site with a recent land purchase, and Krebs expects an update on the foreign strategy.

8. Executive Departures

Tesla lost five senior employees in September, bringing the 2018 total to 15. Musk may be inclined to acknowledge the exodus.

9. Capital Plan

Although Musk has assured Tesla needs no additional capital, analysts expect an imminent raise, and Krebs said “his position seems to be softening.”

10. A Curveball

“There’s always the unexpected,” Krebs said. “What will Musk’s demeanor be on the call as he has been known to be combative, loopy — one never knows which Musk will show up?”

Update: Tesla reported quarterly earnings of $2.90 per share, beating the consensus of a 19-cent per-share loss. The automaker’s $6.82 billion in sales beat estimates of $6.3 billion.

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Photo courtesy of Tesla.