There was a sudden burst of confusion heading into today’s Tesla earnings. As Bloomberg reported, a change in the way Tesla Motors Inc. will report quarterly results after today’s market close has created a bit of a last-minute headache for analysts, with earnings estimates varying widely. The electric-car maker is phasing out most of the non-GAAP adjustments it’s traditionally made, including ones for resale value guarantees or vehicles leased through banking partners. Starting today, when the company discusses third-quarter adjusted non-GAAP earnings per share, it plans to exclude only stock-based compensation.
The SEC in recent months has raised concern that public companies may be straying too far too often from Generally Accepted Accounting Principles. Though Tesla has telegraphed its plan for weeks, many analysts are only now revising forecast models and some are sitting out the guessing game entirely this time. That means it may be challenging to draw firm conclusions about whether Tesla missed or beat Wall Street expectations – giving added importance to what Chief Executive Officer Elon Musk says on a follow-up conference call about cash or production plans.
So heading into today’s earnings, the average estimate in a Bloomberg survey of analysts stands at an adjusted loss of 54 cents a share, based on seven forecasts that have comparable methodologies that the firms say take the new practice into account. While all seven of those projected a loss, there are others who say the company may post a profit.
Well, those who expected a profit got just that, because momnets ago Tesla not only reported revenue of $2.3 billion, far higher than the $1.9 billion expected, but also reported its first quarterly profit of $74 cents, smashing consensus estimate of a 54 cent loss.
Since there will be much confusion over how these numbers make any sense, here is what the company said:
This post was published at Zero Hedge on Oct 26, 2016.
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