Analysts’ Views: When Could Tesla Become Profitable Again?



Tesla’s first-quarter earnings

On April 24, Tesla (TSLA) released its dismal first-quarter earnings report. After posting profitability in the previous couple of quarters, the company returned to net losses again in the quarter.

While Tesla expects to be profitable again in the third quarter this year, it expects to significantly limit its losses in the second quarter with the help of stronger car deliveries and cost reductions. Let’s take a look at Wall Street analysts’ expectations for Tesla’s second quarter.

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Analysts’ estimates for the second quarter

According to Wall Street analysts’ estimates compiled by Thomson Reuters as of April 24, Tesla is expected to report GAAP (generally accepted accounting principles) losses and non-GAAP profits in the second quarter of 2019. Analysts’ estimates suggest that Tesla’s adjusted EPS could be $0.54 in the second quarter, better than its adjusted net EPS of -$2.90 in the first quarter.

Analysts expect Tesla’s second-quarter revenue to rise 57.7% YoY (year-over-year) and 39.0% sequentially to $6.31 billion. According to these estimates, the company’s consolidated gross margins are expected to be 19.1% and 19.8%, respectively, in the second and third quarters, far better than its 12.5% gross margin in the first quarter.

These consensus estimates are very likely to change in the next couple of weeks due to adjustments in some analysts’ forecasts based on Tesla’s first-quarter financials.

First-quarter earnings season

Ford Motor Company (F), General Motors (GM), and Fiat Chrysler Automobiles (FCAU) will be releasing their first-quarter earnings results on April 25, April 30, and May 3, respectively. Tesla’s Chinese peer NIO (NIO) hasn’t yet announced its first-quarter earnings release date.


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