What To Expect From Tesla's Q3 Earnings

Tesla's (NASDAQ: TSLA) last earnings report was a hit, with the EV maker sailing past $1 billion in quarterly net income for the first time. Therefore, shareholders will be hoping for another beat when Tesla reports earnings this week.

Investors expect that Tesla had a good quarter as the company has already released its delivery numbers. The growth in vehicle sales will surely translate to significant top-line growth and strong earnings growth during the period too, which has shareholders excited for the release. 

However, even though improved scale and higher sales should lead to a meaningful jump in earnings, it's not yet clear how they will impact profit margins given the challenging supply and logistics environment Tesla has struggled with.

With its share price up almost 18% over the past six months, can one of 2020's best-performing stocks skyrocket when it reports earnings on Wednesday? 

When is Tesla's earnings date?

Tesla reports earnings for the third quarter of 2021 on Wednesday, 20 October after the closing bell at 5:00 PM Eastern Time.

How can I listen to Tesla's earnings call?

To listen to the call and to access the transcript, as well as the shareholder's letter and the financial statements for the quarter, all you need to do is go to Tesla's Investor Relations page.

What to expect from Tesla's earnings

Here are a few things investors will be looking out for from Tesla's earnings Q3 call: 

Earnings and revenue growth: Wall Street expects Tesla to post adjusted earnings of $1.54 per share on revenue of around$13.7 billion. Analysts are also expecting gross profit margins are projected to be just below 24%, compared with just above 24% in the previous quarter. As usual, shareholders will be keen to see an earnings beat to relieve any concerns centered around Tesla's safety probes.

Strong delivery numbers: Earlier this month, the company reported jaw-dropping third-quarter delivery numbers. The company raced past its rivals to report record-breaking sales. As many of its competitors struggled with supply chain issues and the global chip shortage, Tesla recorded 241,300 sales in the third quarter, boosted by the popularity of its newer Model 3 sedan and Model Y crossover. These models made up around 96% of sales in Q3. Deliveries were up 20% from the second quarter and a whopping 73% from the same period last year. Tesla also notched another fresh record in the quarter -- most cars produced in a three-month period -- by building 237,823 vehicles. 

Chip shortages: The EV manufacturer still faces chip shortages and supply chain challenges, so investors might also like to hear the company's plans on how it expects to meet its vehicle number targets with these challenges. 

Safety probes: Tesla has been hit with government intervention this quarter. It seemed like you could not go a week without a headline detailing that the company was under investigation for safety concerns or was under severe scrutiny for their handling of an issue. All this negative press has impacted the brand's reputation but with the firm still posting high vehicle sales, shareholders might question whether or not the issues have had any lasting damage on the company. 

Domination of the Chinese market: In addition, we can expect Tesla to discuss the company's expansion into the Chinese market on the call. This year, the EV maker has been hit with product recalls due to safety issues, which have resulted in the brand becoming less popular in the country. Analysts are expecting 40% of Tesla's sales to come from China by next year so it will be important for Elon Musk to show there is growth in the region. 

With local rivals NIO and Xpeng stepping up their game in the competitive EV space, shareholders will surely push Tesla to comment on its plans to dominate the important Asian market. 

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