Tesla's Earnings Preview: Will Tesla Zoom Past Its Guidance Or Stall And Fall Short?

Tesla Motors TSLA will report its third quarter results on Wednesday after market close. Analysts are expecting the electric-vehicle manufacturer to report a loss of $0.01 per share on revenue of $889.28 million. During Tesla's second quarter letter to investors, the company guided the following for its third quarter:

• Production of nine thousand vehicles.
• Delivery of 7,800 Model S vehicles, leasing of around 300 vehicles.
• Operating expenses to rise by around 20 percent for research and development and 15 percent for selling and general administration.
• Automotive gross margins to be consistent with previous quarters.
• Marginal non-GAAP profitability.

Quarterly Developments

Tesla's quarter was full of new developments. Naturally, investors will need to keep these events in mind prior to any investment. As well, investors should pay attention to any comments Tesla's management that further expands on the developments.

• Tesla announced it increased the drive unit warranty for its Model S vehicle to eight years and infinite miles. The company did note that the move will have a “moderately negative” impact on its earnings in the near-term.
• Analysts at Stifel Nicolaus published a bullish report on Tesla by upgrading shares to Buy rated with a $400 price target. The analysts stated that they find it reasonable to see the company achieving a run rate of 1,000 units per week by the end of 2014. Analysts at Goldman Sachs separately said that they believe Tesla will need another $6 billion in capital through 2025.
• Tesla's CEO Elon Musk said on September 4 that it's new Giga factory in the state of Nevada will pass produce electric vehicles for decades to come. The eccentric billionaire executive expects Tesla's factory to produce 50GWh in annual production by 2020. Panasonic is expected to contribute 30 percent to 40 percent of the factory's total cost as part of a collaboration between the two companies.
• A few days later, the state of Nevada confirmed $1.3 billion in tax breaks and other incentives have been approved.
• Musk told CNBC “I think our stock price is kind of high right now, to be totally honest.” Musk did clarify that shares are trading at a good price for long-term investors that can survive short term volatility.
• Inside EVs estimated Tesla's monthly unit sales were 2,500 in September which would make a monthly sales record for the company.
• Tesla introduced a dual-motor Model S vehicle with a range of 275 miles on a single charge with a 0-60 mph acceleration of 3.2 seconds.
• Tesla announced a new leasing program along with a three month no questions asked return policy for new vehicles. The move came at the same time as reports surfaced that September sales plunged 26 percent year over year. However, Musk tweeted that September sales were in fact 65 percent higher than they were a year ago, contrasting earlier reports.