Tesla (TSLA) is expected to report first-quarter earnings after the bell on Tuesday, providing a much-awaited update on the EV maker's current and future prospects amid weak investor sentiment.
Tesla's first quarter was a real roller coaster. The company reported disappointing fourth-quarter results, issued weak and unspecific 2024 delivery guidance, missed first-quarter deliveries, and failed to refute reports about the demise of sub-$30,000 mass-market EVs. As a result, stock prices took a big hit. Tesla stock has fallen 43% since the beginning of the year and is down 19% over the current seven-day period.
Tesla is expected to post adjusted earnings of $0.52 per share and revenue of $22.31 billion in the current quarter, according to Bloomberg consensus estimates. This is the first decline in sales in four years.
In terms of profitability, Tesla's operating profit is expected to be $1.49 billion, down 40% year over year. In terms of non-GAAP measures, TheStreet estimates adjusted net income of $1.79 billion and EBITDA of $3.32 billion.
The decline in sales and profitability came after Tesla's quarterly sales fell short of expectations. In the first quarter, Tesla reported global deliveries of 386,810 vehicles, well below the estimate of 449,080 vehicles, and production of 433,371 vehicles, also below the estimate of 452,976 vehicles. .
The difference between the number of cars produced and the number of cars sold is about 46,500, leading to concerns about a decline in global demand for Tesla cars, leading to a series of price cuts. Tesla also lowered the prices of its cars in the United States and China on Monday, leading to a drop in the stock price during the day.
Investors will also be keeping an eye on Tesla's future product roadmap. The long-awaited next-generation platform underpinning the sub-$30,000 mainstream EV (called the Model 2), which uses an innovative “boxless” production line to cheaply manufacture these vehicles, is a big deal for Tesla. It was seen as a large-scale strategy.
After Reuters reported that Tesla would stop selling cheap EVs, Musk responded: on X, previously said on Twitter that Reuters was “lying (again)” and later returned to the stage to announce the unveiling of a robotaxi, which is generally understood to have no steering wheel or pedals. Cost EV.
Analysts say there are risks in switching to robotaxis instead of cheaper electric vehicles.
Tesla reveals “key reason” why many people own stock: Model 2 “will re-accelerate volume, margin and FCF” as a volume strategy. [free cash flow]” Deutsche Bank's Emanuel Rosner wrote in a note earlier this month. It would also mean that the bullish thesis is based on Tesla's cracking of the code for self-driving, which requires overcoming many regulatory hurdles and obtaining enough data to train the software. There will be a need.
Analysts like Bank of America's John Murphy believe Model 2 is far from over.
“In the fourth quarter 2024 earnings call, management stated that the vehicle is in development and the SOPs are optimistic.” [start of production] Probably for [the second half of 2025]However, CEO Elon Musk acknowledged that the introduction of new technology may cause the production process to be slower than expected,” Murphy wrote in a note to customers on Monday. wrote. “In our view, Tesla is still developing the Model 2 given that it is a fundamental part of the company's growth story.”
Finally, Tesla may also address other major business matters, including the status of Tesla's recently announced layoffs of more than 10% and management's stance on new shareholder votes scheduled for 2016. (and will likely be asked on the post-earnings conference call). June. The vote will cover changes to Tesla's corporate structure and whether to approve Musk's controversial pay package from 2018, which was invalidated by a Delaware court.
Pras Subramanian is a reporter for Yahoo Finance.you can follow him twitter And even more Instagram.
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