Tesla Motors, Inc.
) is set to report first-quarter 2014 results after the market
closes on May 7. In the fourth quarter of 2013, it posted an
earnings surprise of +250%. Let's see how things are shaping up
for this announcement.
Factors Influencing This Quarter
Tesla's vehicle deliveries are expected to reduce to 6,400
cars in the first quarter from 6,892 cars in the fourth quarter
of 2013, despite increase in production volume. Although this
decline is mainly due to increase in the number of vehicles in
transit to Europe and Asia, it will negatively affect
Moreover, operating expenses are expected to increase 15% in
the first quarter of 2014. Further, the company believes that
research and development expenses will increase due to design and
engineering work on Model X. Selling, general and administrative
expenses are also projected to rise due to increase in retail
locations and Supercharger facilities.
Further, Tesla is facing a shortage of lithium-ion battery
cells due to which it is unable to meet the rising demand for
Model S. Although the company extended its supplier agreement
), the shortage of battery cell supply is expected to limit
production capacity in the first half of the year.
Our proven model does not conclusively show that Tesla is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here, as you will see below.
The Earnings ESP, which represents the difference between the
Most Accurate Estimate and the Zacks Consensus Estimate, is
60.00%. This is because the Most Accurate Estimate stands at a
loss of 4 cents and the Zacks Consensus Estimate is currently at
a loss of 10 cents.
Tesla currently has a Zacks Rank #5 (Strong Sell), which when
combined with a positive ESP, makes surprise prediction
We caution against stocks with a Zacks Rank #4 or 5
(Sell-rated stocks) going into the earnings announcement,
especially when the company is seeing negative estimate revisions
Other Stocks to Consider
Here are two other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
Advance Auto Parts Inc.
), with an Earnings ESP of +5.12% and a Zacks Rank #3 (Hold).The
company is expected to report its first-quarter results on May
Power Solutions International, Inc.
), with an Earnings ESP of +8.70% and a Zacks Rank #2 (Buy).
Power Solutions will be reporting first-quarter 2014 earnings on
May 8, 2014.
ADVANCE AUTO PT (AAP): Free Stock Analysis
PANASONIC CORP (PCRFY): Get Free Report
POWER SOL INTL (PSIX): Free Stock Analysis
TESLA MOTORS (TSLA): Free Stock Analysis
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