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Tesla Earnings: The Most Important Thing to Watch

IIt’s been a roller coaster year for You’re here (NASDAQ: TSLA) investors. The stock started the year at around $1,200 per share. But then the automaker’s stock price fell to levels well below $800. Today, the electric car maker’s stock price is just below $1,000. Much of this volatility is indicative of the significant uncertainty surrounding the company’s outlook, particularly in the near term. A factory shutdown in Shanghai amid government-imposed COVID-19 restrictions means the company’s production rates are taking a hit, and no one knows the exact impact.

Fortunately, Reuters reported on Friday that the company is expected to resume operations at its factory in China on Monday. But it would not be surprising to see a slow recovery to previous production levels, as the involvement of third-party suppliers is also necessary.

Investors, of course, are hoping for answers when Tesla releases its first quarter results on Wednesday. How quickly does the automaker expect its Shanghai plant to return to pre-shutdown production levels? Does Tesla still have a chance of meeting its full-year guidance for vehicle deliveries?

So it’s fair to say that any outlook the company provides for full-year vehicle deliveries will be the most important topic for investors to watch when Tesla reports earnings this week.

Tesla’s current advice

In the electric carmaker’s latest quarterly update, management said in its earnings call that it expects to increase deliveries in 2022 at a growth rate “comfortably above 50%”. This outlook is particularly impressive given the global shortage of semiconductors and other supply chain challenges facing the automotive industry. What’s more, this growth rate is on top of last year’s: Tesla’s 2022 shipments are up 87% year-over-year.

But at the time Tesla management provided the guidance, management expected its Shanghai factory to be operational throughout the year.

Tesla factory. Image source: The Motley Fool.

Why Tesla might stick to its directions

While a three-week shutdown of the company’s factory in Shanghai certainly increases the odds that Tesla will have to cut its outlook for full-year vehicle deliveries, there’s still a chance that Tesla could be on the mend. height of its initial prospects. This argument comes down to the company’s new factories in Germany and Texas. At the time of the automaker’s fourth-quarter update, management said it could likely achieve more than 50% growth without any contribution from these new plants. But since that report, both factories have come online — and both could turn into substantial production volume powerhouses for Tesla.

We’ll see if management thinks they can still achieve their goal soon. Tesla is expected to release its first quarter results after market close on Wednesday, April 20.

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Daniel Sparks has no position in the stocks mentioned. The Motley Fool owns and recommends Tesla. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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