Tesla Q3 FY2022 Earnings Report Preview: What to Look For

Key Takeaways

  • Analysts estimate adjusted EPS of $1.01 vs. 62 cents for Q3 FY 2021.
  • The variety of automobiles produced by Tesla, reported earlier this month, rose considerably however at a slower tempo than for Q3 FY 2021.
  • Income development is predicted to speed up on a YOY and a sequential foundation.

Tesla Inc. (TSLA), the most important vehicle producer on the planet by market capitalization, will possible say that year-over-year (YOY) revenue development decelerated relative to the prior-year quarter for Q3 FY 2022 amid a cooling economic system and ongoing provide chain challenges.

Tesla most likely say adjusted earnings per share (EPS) excluding sure objects rose 63.2% YOY to $1.01, whereas income elevated by 58.9% to $21.9 billion, in response to a mean estimate from Seen Alpha. The corporate accomplished a 3-for-1 inventory break up in August 2022.

Carmakers like Tesla have had problem assembly buyer demand in current months as international shortages of supplies utilized in auto manufacturing have throttled manufacturing capability. Now, as the worldwide economic system cools and shoppers concern a doable recession, demand could begin to wane. A backlog of automobiles in Tesla’s stock may counsel that it has produced extra vehicles than it has been capable of promote as shopper demand drops. Tesla Chief Govt Officer (CEO) Elon Musk additionally has engaged in a extremely publicized and acrimonious authorized battle with Twitter Inc. (TWTR) since he initially provided to buy that firm in April 2022. Musk has offered or borrowed in opposition to billions of {dollars} of Tesla inventory to assist fund the deal, doubtlessly affecting the carmaker’s inventory value.

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Traders have already got seen one key metric introduced on Oct. 2, 2022: quarterly automobile manufacturing numbers, which give an early indication of earnings and income. Tesla produced 365,923 automobiles for Q3 FY 2022 and solely shipped 343,830, pointing to a doable backlog, as described. Nonetheless, Tesla’s manufacturing beat analyst expectations of 363,300 for the quarter.

Tesla inventory rallied in late July and early August however has in current weeks declined considerably, greater than giving up these positive factors. The inventory has carried out erratically within the final 12 months however total has dropped by a large margin. Tesla shares have supplied a one-year trailing whole return of -24.6%, in contrast with -19.3% for the S&P 500 as of Oct. 17, 2022, as proven under.

Supply: TradingView.

Tesla Earnings Historical past

Tesla’s adjusted EPS grew at an amazing tempo all through FY 2020 and FY 2021. The corporate’s quarterly adjusted EPS greater than doubled YOY in all however a type of quarters. This tempo stored up for Q1 FY 2022 however dropped drastically final quarter, when the corporate posted adjusted EPS positive factors of a comparatively modest 56.9% YOY. Analysts predict one other slowdown in adjusted EPS development relative to the prior-year quarter for Q3 FY 2022, though adjusted EPS development is predicted to speed up barely as compared with Q2.

The corporate’s income efficiency has been extra modest. Income has climbed YOY for every quarter for the reason that starting of FY 2020, save for Q2 of that 12 months. It accelerated from 39.2% YOY development in Q3 FY 2020 to 98.1% development for Q2 FY 2021. Tesla has not been capable of keep that tempo of development, although. For Q2 FY 2022, Tesla reported the slowest income development in about two years at 41.6%. Now, analysts count on an enchancment on each a sequential foundation and in contrast with the prior-year quarter, forecasting the corporate ought to say income grew by 58.9%.

Tesla Key Stats
  Q3 FY 2022 Q3 FY 2021 Q3 FY 2020
Adjusted Earnings Per Share ($), adjusted for Aug. 2022 inventory break up 1.01 (estimate) 0.62 0.25
Income ($B) 21.9 (estimate) 13.8 8.8
Automobile Manufacturing 365,923 (precise) 237,823 145,036

Sources: Seen Alpha; Tesla Q3 FY 2022, Q3 FY 2021, and Q3 FY 2020 stats

The Key Metric

Automobile manufacturing is a key metric for Tesla, as the corporate’s major enterprise is making electrical vehicles and it must proceed increasing manufacturing to develop income and income. It has grow to be more durable to extend manufacturing ranges amid the aforementioned provide chain points. And as manufacturing ranges develop, Tesla says it faces new logistics challenges as properly, together with the issue of securing new-vehicle transportation capability at an affordable price. This might decelerate deliveries and offset positive factors by elevated manufacturing and gross sales.

Tesla’s automobile manufacturing has slowed due largely to those components, although a turnaround could also be in progress. The carmaker introduced that it produced 365,923 automobiles for Q3 FY 2022, up 53.9% YOY. This determine surpassed analyst predictions. It represents a slight slowdown in automobile manufacturing development YOY relative to Q3 FY 2021, which posted a 64.0% YOY improve in automobiles made. However to make sure, it’s a sharp improve on a sequential foundation, as a 25.3% YOY enchancment in automobiles produced was reported for Q2 FY 2022.