Reviewing Q3 earnings
In the third quarter of 2018, Tesla (TSLA) and CEO Elon Musk managed to prove wrong those analysts who were not expecting the company to turn profitable. The company’s net earnings for the quarter were at $1.75 per share on a GAAP (generally accepted accounting principles) basis, which was better than -$4.22 in the second quarter, the biggest GAAP quarterly loss TSLA has reported so far. In the third quarter of 2017, Tesla reported GAAP earnings of -$3.70 per share.
Analysts’ estimates for Q4 2018
Analysts expect Tesla’s Q4 2018 earnings to stay in the positive territory for the second consecutive quarter. According to the estimates, the company is likely to report non-GAAP earnings of ~$2.19 per share. These expectations were better than TSLA’s adjusted earnings of -$3.04 in the fourth quarter of 2017, but worse than $2.90 in the third quarter of 2018.
In the fourth quarter of 2018, Tesla delivered about 90,700 total car units to its customers, reflecting a massive increase of 202.7% on a year-over-year basis and 8.3% sequentially. These deliveries were composed of ~13,500 Model S units, 14,050 Model X units, and 63,150 Model 3 units. The company delivered 83,775 car units in the previous quarter.
Tesla is a fairly new entrant in the automobile sector (XLY) as compared to other auto companies such as Ford (F), General Motors (GM), and Fiat Chrysler (FCAU). Tesla investors should pay attention to quarter-over-quarter growth along with YoY growth. In China, Tesla is likely to face competition from Chinese EV maker NIO (NIO), which is known as “the Chinese Tesla.” NIO recently launched its second electric SUV (sports utility vehicle), the ES6, in December 2018.
Continue to the next part to learn about analysts’ recommendations for Tesla stock ahead of its fourth-quarter earnings release.