Tesla Inc (NASDAQ:TSLA) (Tesla Inc (NASDAQ:TSLA)) is set to post a year-over-year drop in profit when the electric vehicles maker reports its financial results for the quarter ended in March after the market close on Wednesday.
Analysts, on average, expect the company’s earnings to come in at $0.85 per share, a significant decrease from earnings per share of $3.22 in the year-ago quarter.
Revenue, however, is expected to grow about 25% from $18.76 billion in the first quarter of 2022 to $23.56 billion, according to Zachs Consensus Estimate.
Investors will also have their eye on Tesla’s margins to see the impact of the company’s series of price cuts which helped boost deliveries to a record high during the quarter.
The Street is expecting an automotive gross margin of 23% and an overall gross margin of 21.2% for the quarter, per Bloomberg.
“Tesla could impress if it can offset price cuts with lower costs to protect its margin, but a soft reading could revive concerns over capacity and the lack of new models while putting consensus estimates for 2023 at risk,” commented FOREX.com market analyst Joshua Warner.
“The hope is that improved economies of scale, driven by the ramp-up at newer factories in the US and Germany, and a fall in lithium prices this year will provide some wiggle-room and absorb some of the impact from price cuts.”
CMC Markets UK chief market analyst Michael Hewson noted when handing down Tesla's results for the previous quarter, 4Q 2022, CEO Elon Musk had expressed confidence that, while the aim for Tesla was to make 1.8 million vehicles this year, a figure of 2 million was possible.
“Musk went to great lengths to assure investors about demand saying that orders had been coming in at twice the rate of production since the recent price cuts were announced,” Hewson said.
"Given that 1Q only saw a modest increase in deliveries, despite recent price cuts, one has to question whether Tesla will be able to deliver on the 1.8 million ambition, let alone 2 million deliveries.”
Tesla shares moved higher on Monday afternoon ahead of its results, up 0.7% at US$186.23.
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