Tesla earnings preview: will shares disappoint as costs and supply chains bite?

[MongiIG]

After it surprised on the upside earlier this month on a near 70% rise in year-on-year quarterly deliveries, could Tesla (TSLA) find it only has bad news to publish this time around?

 

 

 Jeremy Naylor | Writer, London | Publication date: Wednesday 20 April 2022 

Tesla Q1 earnings preview: what to expect

It will be the turn of Tesla to report earnings on Wednesday 20 April 2022.

That comes after the closing bell on Wall Street and the stock trades all-sessions on the IG platform, so that will provide an opportunity to trade the share price as it publishes its numbers and as the company delivers anecdotal commentary throughout the evening.

So far as the numbers are concerned, analysts are looking for earnings per share (EPS) of a consensus $2.24 on revenues of $17.63 billion. It's certainly expected that this will be another profitable quarter for the electric vehicle (EV) manufacturer.

It is worth remembering, though, that Tesla doesn't produce revenue numbers, rather it focuses on quarterly deliveries. At the beginning of the month, it told investors that it delivered a record number of its cars in the first quarter - 310 000 to be precise - despite supply chain challenges. That was almost 70% higher than the same period last year.

However, those supply chain issues, now also compounded by enforced Covid lockdowns in China, could see a rather more cautious statement. Additionally, rising input costs could send in another unwanted headwind, a reason why Tesla is considering buying its own lithium mine so it can rely on its own dedicated supply chain of the battery metal. So, all that to watch out for as Tesla details its numbers.

Tesla share price

Let's take a look at the share price. It is worth looking at this in the context of the fact that it's an all-session stock so you can trade this when it produces the data.

As we see things at the moment, it's trading just around about the point at which the company goes into this $1 trillion level of total market worth. It coincides with that 100 000 that you've got on that line there which is $1,000 per share.

Now, the company has applied for a stock split so that number will come down at some point in the future, in the next couple of months or so.

Finally, another potential talking point could be about CEO, Elon Musk's move on Twitter. Will the Tesla chief give any more detail on his possible bid for the social media giant?

I think so far as the shares are concerned, it's certainly well worth watching out for commentary around the difficulties the company is having in terms of its supply chain, the rise in input costs, but also whether or not there is going to be an opportunity, it could well be seen as an opportunity, for Tesla to continue to benefit from Musk's involvement in Twitter.