Will Auto & Energy Sales Drive Tesla's (TSLA) Q2 Earnings?

Tesla, Inc.TSLA is scheduled to announce second-quarter 2018 results on Aug 1. In the last reported quarter, both top and bottom lines beat the Zacks Consensus Estimate. Also, the figures were higher compared with the prior-year quarter.

In the past three months, shares of Tesla have outperformed the industry it belongs to. During the period, the stock has gained 4.2% in comparison with the industry's increase of 0.5%.

In second-quarter 2018, the company produced 53,339 vehicles, which marked 55% rise from the last reported quarter. Of the total, 28,578 were Model 3, whereas the combined Model S and X production number was 24,761 units. This rise in Model 3 production has helped Tesla in clearing delivery backlogs to an extent and is expected to support the company's Automotive segment's revenues as well.

Tesla, Inc. Price and EPS Surprise

Tesla, Inc. Price and EPS Surprise | Tesla, Inc. Quote

Moreover, in order to support Model 3 rollouts, the company is opening supercharger stations in locations that have high requirements and most reservation holders. In the first quarter, Tesla had 1,205 Supercharger stations and more than 9,300 stalls worldwide.

Although the limelight is on Model 3 deliveries, Tesla has also been focusing to develop its energy storage business. In 2018, the company aims to deploy at least three times more of what it deployed in the prior year.

During the second quarter, the company installed powerpacks in a few locations. Tesla powerpacks are large-scale battery packs, which can be plugged into the electric grid to offer services for utilities and companies. In May, it announced completing its powerpack energy storage project in Terhills, Belgium. Roughly 140 powerpacks were installed, along with invertors, which can generate a total power output of 18.2 MW. Except for this, the company has powerpack projects globally, few of which are located in Australia, Philippines, Puerto Rico and France.

Further, Tesla is ramping up its Solar Roof facility in Buffalo to improve product design and the manufacturing process of solar energy generation systems. Also, the company's increased efforts to sell energy-generation and storage systems in stores have widened product availability.

These advancements made by Tesla will drive the Energy and storage segment. Similar to 2017, the company expects a slightly positive cash flow in the first half of 2018 from its solar business. But the cash flow is anticipated to improve from the second half of 2018.

For the soon-to-be-reported quarter, the Zacks Consensus Estimate for Energy generation and storage revenues are pegged at $489 million, marking an increase from $410 million generated in the first quarter.

Currently, the company has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Earnings Schedules of Other Major Auto Companies

Among other automotive companies, American Axle & Manufacturing Holdings, Inc. AXL and Toyota Motor Corporation TM are scheduled to release results on Aug 3, whereas Magna International Inc. MGA is expected to report earnings on Aug 8. Each of the above-mentioned companies carries a Zacks Rank of 3.

The long-term earnings growth rate for American Axle, Toyota and Magna are 8.1%, 5.7% and 8.5%, respectively.

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

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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