This evening, Tesla will announce their first quarter 2021 results as the company pushes forward, slowly but surely capturing more of the motor vehicle market. As we have become so familiar with over recent years, expectations are key to understanding how the company’s stock will perform after the results are released. So here is a quick recap on what to expect.
Going into this evening, wall street analysts are expecting Tesla to deliver approximately $10.4 billion in expected revenue over the course of the past 3 months with adjusted earnings per share of 80 cents. These estimates are substantially larger than the results that the company delivered this time last year which pale in significance. In 2020 the company managed total revenue of $5.99 billion and 23 cents adjusted earnings.
There are two other things that investors will want to know that are not so widely spoken about and that is the tax break companies like Tesla are able to get and the amount of Bitcoin that remains on the company’s balance sheet.
Without the generous tax break that Tesla are able to benefit greatly from, the company would not be able to record a net profit each quarter. Analysts expect that this benefit to be worth approximately $400m this quarter. Why does this matter? If they record a profit with less tax breaks then the company will be improving significantly.
When Elon Musk came out and announced that the company would not only allow Bitcoin payments but also HODL bitcoin it started another bull run on the crypto currency. Since the announcement, Tesla would have earned a net unrealised gain on their currency that is worth more than the total combined profit the company had recorded throughout its existence. What will be useful to know is whether the company sold some of their Bitcoin or added to it.
This all comes amid what has been a diplomatic tour of sorts from CEO, Elon Musk who has been assuring Chinese authorities that he will never pass over information that had been generated through the use of his cars to the US government. The reassurance comes amid what will become a power struggle in the future between the two countries that neither will want the other to gain a distinct advantage over. For Tesla though, its important that the Chinese government are onboard as the Shanghai Gigafactory gathers pace which will be so instrumental in the company’s success abroad.
Investors are pretty keen to see something surprising in the earnings and are letting it show on Twitter. One investor encourages Chinese people to go and buy TSLA – Great work! Although I do agree with his point. China is critical and investors know that yet there is still questions as to whether the country will allow an American business succeed.