What investors expect from Tesla's earnings Wednesday evening

Unable to string together profitable quarters, electric vehicle and solar cell maker Tesla Inc.is reporting a loss for the last three months of 2016.

Tesla said it lost $121.3 million, or 78 cents a share, compared to $320.4 million, or $2.44 a share, a year ago on an unadjusted basis.

The company also said it was on track to deliver between 47,000 and 50,000 Model S and Model X SUVs in the first half of this year.

Adjusted, Tesla lost $106.5 million, or 69 cents a gallon, compared to $264.8 million, or 75 cents a share, in the same quarter a year ago.

The electric vehicle and renewable energy firm lost 78 cents per share in the 4th quarter, beating analysts expectations of 99 cents per share.

Beats revenue estimates. The company saw revenues of $2.28 billion, topping our consensus estimate of $2.201 billion and gaining 88.4% year-over-year. That notwithstanding, Tesla deliveries in 2016 were almost 50% higher than they were during 2015, a testament to the growing popularity of the Model S and the Model X. It may be hard to determine how much it impacted Tesla's numbers unless management provides specific information on SolarCity.

Investors and analysts alike were waiting to see how Tesla Inc (TSLA) would incorporate SolarCity's results, as this is the first earnings report since the acquisition and it never said much about how it would report that segment.




The complete text of the Tesla Fourth Quarter 2016 Update letter can be seen at the end of this article. Normally this spread should be in positive territory, indicating that analysts expect an investment's value to increase over time. Tesla closed near the middle of a 2-week trading range.

The company financials could be complicated by a new addition to the Tesla family, SolarCity.

Tesla stock peaked at $287.28 on 14 February, but then failed to close above the $286.55 high from July 2015.

Tesla continued efforts this year to fulfill its founding mandate - bring electric vehicles to mainstream consumers and provide solar power.

Elon Musk also faces the challenge of integrating SolarCity into Tesla. Deutsche Bank AG reaffirmed a "hold" rating and issued a $215.00 price objective (down previously from $290.00) on shares of Tesla Motors in a research report on Tuesday, December 13th.

Following the economies of scale argument, Tesla can further reduce that cost down as another Gigafactory will be constructed in Europe this year.

The options market has priced in an expected share price move of just over 6% in either direction around the earnings release, according to the Market Maker Move™ indicator on the thinkorswim® platform.

(Copyright © 2015. All Rights Reserved.)
 
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