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Price Cuts & High Deliveries to Fuel Tesla (TSLA) Q1 Earnings

Tesla TSLA is set to release its first-quarter 2023 results on Apr 19, after the closing bell. The focal point of the electric vehicle (EV) manufacturer’s earnings release will be its vehicle production and deliveries. Stronger-than-expected deliveries during the quarter under discussion are likely to have enhanced results.

(Also Read: Tesla to Report Q1 Earnings: Is a Beat in Store?)

Q4 Highlights

In the last reported quarter, Tesla reported earnings of $1.19 per share, which surpassed the Zacks Consensus Estimate of $1.09. This marked the eighth straight earnings beat for the company. Higher-than-expected revenues from Energy Generation and Storage and the Services and Other segments resulted in this outperformance. The bottom line also compared favorably with the year-ago earnings of 85 cents a share. Total revenues came in at $24,318 million, surpassing the consensus mark of $23,729 million. The top line, however, witnessed year-over-year growth of 37.2%.

Production and delivery totaled 439,701 and 405,278 vehicles, respectively, for fourth-quarter 2022, reflecting a year-over-year jump of 44% and 31%, respectively. Model 3/Y registered production and deliveries of 419,088 and 388,131 vehicles, respectively, marking year-over-year growth of 43% and 31%, respectively. Production and delivery of the Model S/X totaled 20,613 and 17,147 units, respectively.

Tesla had cash/cash equivalents and long-term debt and finance leases of $22,185 million and $1,597 million, respectively, as of Dec 31, 2022. The firm generated a free cash flow of $1,420 million during fourth-quarter 2022, falling 148.8% year over year.

Record Q1 Deliveries Outpaced Estimates

First-quarter deliveries totaled 422,875 units, up 36.4% from the year-ago quarter and 4% from the prior quarter, which also surpassed the Zacks Consensus Estimate for total vehicle deliveries of 412,884. To counter rising interest rates that have made financing vehicles expensive, Tesla has lately resorted to price cuts on most of its models to spur demand. With the vehicles getting more affordable, the company is witnessing strong orders. These price cuts make its cars more competitive compared with rivals and also make several of its models eligible for the $7,500 tax rebates.

Tesla’s models 3 and Y are the company’s most successful EVs, accounting for most of its sales. For the quarter, Tesla delivered 412,180 of those, surpassing the Zacks Consensus Estimate of 390,820 units. However, deliveries of models S and X lagged estimates. First-quarter 2023 deliveries of models S and X came in at 10,695 units, below the Zacks Consensus Estimate of 18,745 units.

As for production, Tesla manufactured 440,808 vehicles (421,371 units of Model 3/Y and 19,437 units of Model S/X). How does that compare with estimates? For the quarter under discussion, the Zacks Consensus Estimate for total production was 452,468 units (433,563 Model 3/Y units and 18,906 Model S/X units).

Overall Earnings & Revenue Projections for Q1

Our proven model predicts an earnings beat for Tesla as it has the right combination of a positive Earnings ESP and a favorable Zacks Rank. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The company has an Earnings ESP of +0.19%. Tesla currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 85 cents per share, indicating a decline of 20.56% on a year-over-year basis. The consensus mark has remained unchanged in the past seven days. The Zacks Consensus Estimate of $23.56 billion for sales indicates a 25.62% rise on a year-over-year basis.

Other Stocks With the Favorable Combination

Here are a few more players from the auto space that, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:

Autoliv ALV will release first-quarter 2023 results on Apr 21. The company has an Earnings ESP of +13.76% and a Zacks Rank #2.

The Zacks Consensus Estimate for Autoliv’s to-be-reported quarter’s earnings and revenues is pegged at 82 cents per share and $2.21 billion, respectively. ALV surpassed earnings estimates in two of the trailing four quarters and missed in the remaining two in fiscal year 2022, the average surprise being 9.79%.

Lear LEA will release first-quarter 2023 results on Apr 27. The company has an Earnings ESP of +5.61% and a Zacks Rank #3.

The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $2.47 per share and $5.28 billion, respectively. LEA surpassed earnings estimates in all the trailing four quarters in fiscal year 2022, the average surprise being 17.12%.

Mobileye Global Inc. MBLY will release first-quarter 2023 results on Apr 27. The company has an Earnings ESP of +11.94% and a Zacks Rank #3.

The Zacks Consensus Estimate for Mobileye’s to-be-reported quarter’s earnings and revenues is pegged at 13 cents per share and $463.3 million, respectively. MBLY surpassed earnings estimates in two out of the trailing four quarters in fiscal year 2022, the average surprise being 32.69%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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