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What You Need to Know Ahead of Tesla's Earnings

Tesla CEO Elon Musk speaks during an event to launch the new Tesla Model X Crossover SUV

Justin Sullivan / Staff / Getty Images

Key Takeaways

  • Tesla Inc. is to report earnings for the fourth quarter on Wednesday after market close, with analysts projecting revenue of around $25.88 billion, operating income near $2.23 billion, and earnings per share at 78 cents.
  • The electric vehicle (EV) maker reported record-high quarterly deliveries in the fourth quarter as average sales prices dropped, according to Kelley Blue Book estimates.
  • CEO Elon Musk could touch on cost-cutting measures to offset weak Cybertruck margins, increased labor costs, and losses from supply-chain disruptions.

Tesla Inc. (TSLA) is set to post fourth-quarter earnings on Wednesday, Jan. 24, at 5:30 p.m. ET after reporting record-high deliveries. Chief Executive Officer (CEO) 澳洲幸运5官方开奖结果体彩网:Elon Musk could comment on how the 澳洲幸运5官方开奖结果体彩网:electric vehicle (EV) pioneer will offset sale price cuts, increased labor costs, an🌳d losses from supply-chain disruptions.

Revenue is expected to be around $25.88 billion, according to consensus estimates collected by Visible Alpha, 🙈up from the previous quarter and the fourth quarter of 2022, when revenue came in at $23.35 billion and $24.31 billion, respectively. 

Analysts anticipate adjusted 澳洲幸运5官方开奖结果体彩网:earnings per share (EPS) will rise to 78 cents, up from 66 cents in the✱ third quarter, but down from $1.19 in ♔the same period of the previous year. Operating income is expected to be $2.23 billion, up from $1.76 billion in the third quarter but off from $3.39 billion in the fourth quarter of 2022.

   Analyst Estimates for Q4 2023  Q3 2023  Q4 2022
Revenue   $25.88 billion  $23.35 billion  $24.31 billion
 (Diluted) Earnings Per Share  $0.78  $0.66  $1.19
 Operating Income  $2.23 billion  $1.76 billion  $3.39 billion

Key Metric:

Tesla already reported 澳洲幸运5官方开奖结果体彩网:record-high quarterly deliveries for the fourth quarter. Declining prices could have contributed to stronger sales, with the average transaction price for a Tesla vehicle at $50,051 in December, a more than 25% drop from the previous year, according to Kelley Blue Book estimates.

Last quarter, Musk said the EV maker’s price cuts were ineffective due to high interest rates. Since then, the Fed has 澳洲幸运5官方开奖结果体彩网:indicated that rate cuts are coming in 2024, altho𝔍ugh pricing pressure could still take a toll on Tesla’s earnings.

Despite the strong delivery numbers, analysts at Deutsche Bank said that the firm "continue[s] to see large downside risk to earnings expectations, due to a much lower volume outlook than the market assumes, pricing pressure, Cybertruck margin impact, and higher tax rate in China."

Business Spotlight

In the fourth quarter of 2023, Tesla officially launched the Cybertruck, which was first announced in 2019. The launch was followed by investor concerns about scaling Cybertruck production and deliveries. Wedbush Se𒐪curities analysts said they expect the company won't see positive cash 🎐flow from the vehicle for another 12 to 18 months.

Musk and other Tesla officials could comment on cost-cutting measures to offset increased labor costs and losses associated with 澳洲幸运5官方开奖结果体彩网:supply-chain challenges.

Tesla 澳洲幸运5官方开奖结果体彩网:reportedly has increased wages for some production employees amid pressure to unionize by the United Auto Workers (UAW) union. Deutsche Bank analysts estimated the increased wages could cost $360 million in incremental annual labor cost, a 3% hit to 2024 澳洲幸运5官方开奖结果体彩网:earnings before interest and taꦉxes (EBIT).

The company announced a production stoppage at its Berlin facility due to supply chain disruptions in the Suez Canal. Bank of America analysts said Tesla was the only automaker in their coverage to be impacted but they "expect that other companies with a large footprint in Europe, mainly suppliers, may be negatively affected."

Tesla shares doubled in 2023 significantly outpacing all major indexes along with other 澳洲幸运5官方开奖结果体彩网:Magnificient 7 stocks.

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