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Tesla, Inc. Earnings: What to Expect From Gross Margin

23 February 2017

Tesla Motors (NASDAQ:TSLA) last posted its quarterly earnings results on Wednesday, October 26th. The Palo Alto, California-based company lost 69 cents per share during the final three months of a year ago, beating analysts' estimates. Tesla watchers expect more details about the company's future plans and production schedule for another new vehicle, the Model 3.

Without one-time items Tesla lost 69 cents per share. The average estimate of nine analysts surveyed by Zacks Investment Research was for a loss of 13 cents per share.

Tesla, which is led by billionaire entrepreneur Elon Musk, said revenue rose 88 percent to $2.28 billion. You add a layer of difficulty when the electric vehicle in question is a Tesla Model S P100D with all-wheel-drive dual motor and over 700 horsepower. It may be hard to determine how much it impacted Tesla's numbers unless management provides specific information on SolarCity.

Investors are closely watching today's report, since it's Tesla's first since acquiring Solar City. (NASDAQ:TSLA) by 318.7% during the fourth quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). Sales of $2.18 billion are expected, from $1.75 billion a year earlier.

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Tesla shares have climbed 28 percent since the beginning of the year. Tesla reported 373,000 pre-orders for the Model 3 as of May, when it last updated its reservation tally. Wall Street will be eager to hear details on the Model 3, the all-electric mass-market auto that Chief Executive Elon Musk hopes to start producing in July and selling later this year.

Another troubling fact is that automotive gross margins fell by 280 basis points sequentially on a non-GAAP basis, when excluding SBC and ZEV credits. Oppenheimer Holdings, Inc. reissued a "market perform" rating on shares of Tesla Motors in a report on Wednesday, February 1st.

The company also clarified its plans for the production ramp up. The shares were sold at an average price of $254.44, for a total value of $1,424,864.00. But if Musk and Tesla deliver, there might not be enough hyperbole left to describe what they've pulled off. The current share price indicate that stock is -5.28% away from its one year high and is moving 73.75% ahead of its 52-week low. Musk envisions the combined company offering a full selection of renewable energy products - from solar panels, roofs and home power storage to electric vehicles. Given that its average daily volume over the 30 days has been 4.65 million shares a day, this signifies a pretty significant change over the norm.