Earnings Watch: Analysts Sharply Divided on Tesla Ahead of Q1 Report

NEW YORK (TheStreet) -- Tesla Motors  (TSLA) is scheduled to report first quarter earnings after the market close on Wednesday, May 6, with a conference call scheduled for 5:30 pm EDT. Tesla designs, manufactures and sells electric vehicles, including its flagship Model S.

EXPECTATIONS: Analysts are looking for losses per share of (50c) on revenue of $1.04B, according to First Call. The consensus range for EPS is (77c)-(19c) on revenue of $947.9M-$1.14B. With its last report, Tesla guided to Q1 production of about 10,000 vehicles. On April 3, Tesla said it delivered 10,030 cars in Q1, which it noted "is a new company record for the most deliveries in a quarter and represents a 55% increase over Q1 last year." Going forward, Tesla will publish the number of new car deliveries within three days of quarter end. It stated, "We have decided to take this approach, because inaccurate sources of information are sometimes used by others to project the number of vehicle deliveries."

LAST QUARTER: On February 11, Tesla reported fourth quarter adjusted losses per share of (13c), against estimates for a 31c per share gain. The company reported adjusted revenue of $1.1B, versus the consensus forecast of $1.23B. The company reported Q4 production of 11,627 vehicles. Tesla said at the time that about 1,400 vehicles slipped in December and delivered in Q1 instead, citing shipping problems and bad weather. The company noted that its Q4 results reflected the delivery shortfall and the impact of the strong U.S. dollar.

NEWS: On March 19, Tesla announced details of its latest update to the software for the Model S, which introduced two applications that ensure drivers "never unintentionally run out of range," namely the Range Assurance and Trip Planner apps. On April 8, Tesla introduced the Model S 70D, an all-wheel drive electric car with a starting price of $75,000. The Model S 70D replaced the 60 kWh version, with a starting price that is $5,000 higher than that of the version it replaced. On May 1, Tesla introduced Tesla Energy, a suite of batteries for homes, businesses, and utilities. The batteries will enable users to store sustainable and renewable energy, to manage power demand, and provide backup power, the company stated.

STREET RESEARCH: On the day after Tesla last earnings report, JPMorgan analyst Ryan Brinkman downgraded Tesla to Underweight, the firm's sell rating equivalent, from Neutral. The firm cited weaker execution, stronger competition and the negative impact of lower oil prices for its rating change. On April 20, JPMorgan cut its price target for Tesla shares to $165 from $175 after lowering its earnings estimates to reflect adverse currency moves, higher operating costs and the slower than previously expected Model X ramp. On March 13, Deutsche Bank cut its 2015 earnings estimate for Tesla by 80% to 11c from 52c to account for the car maker's exposure to the weakening euro, pointing out that 30% of Tesla's global sales are exposed to Europe's shared currency. The firm kept a Buy rating and $245 price target on Tesla, however, believing the company’s cost structure and car sale prices will "overwhelm" adverse currency moves over the longer term. On March 25, CLSA downgraded Tesla two notches to Underperform from Outperform, as the firm contended that lower initial profit margins on Tesla's upcoming Model X model may limit the stock's ability to advance. On April 28, Bank of America Merrill Lynch said it continues to believe Tesla's stationary storage opportunity is limited and likely longer dated than its goal of reaching auto business profitability. The firm, which said it expects significant Q1 cash burn and operating losses, reiterated its Underperform rating and $65 price target on Tesla shares. Tuesday morning, Jefferies analyst Dan Dolev initiated shares of Tesla with a Buy rating and $350 price target. Dolev views worries about China sales as overblown and points out his firm's consumer survey indicates Tesla could sell at least 500,000 cars per year by 2020 in North American and Western Europe alone. Among those surveyed by Jefferies, 68% are considering alternative fuel vehicles and 7% considering a Tesla.

PRICE ACTION: Over the last three months, Tesla shares have risen about 6%. In early afternoon trading ahead of Wednesday's report, Tesla's stock was trading near $232 per share.

Reporting by Jason Keil.

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