Blockbuster Deliveries to Drive Tesla's (TSLA) Q4 Earnings

Tesla TSLA is set to release fourth-quarter 2021 results on Jan 26, after the closing bell. The red hot electric vehicle (EV) maker’s results will likely mirror the favorable impact of breakthrough vehicle deliveries achieved during the quarter.

(Also read: Why We Expect Tesla to Deliver Q4 Earnings Beat)

Q3 Highlights

In the last reported quarter, Tesla posted earnings of $1.86 per share, topping the Zacks Consensus Estimate of $1.39. Moreover, the metric compared favorably with the year-ago earnings of 76 cents a share. Total revenues came in at $13,757 million, surpassing the consensus mark of $13,163 million. The top line also witnessed year-over-year growth of 56.8%.Total automotive revenues surged 58% year over year to $12,057 million in the third quarter. Tesla had cash and cash equivalents of $16,065 million as of Sep 30, 2021, compared with $14,531 million on Sep 30, 2020. Net cash provided by operating activities amounted to $3,147 million in third-quarter 2021.

During the September-end quarter, Tesla reported production and delivery of 237,823 and 241,391 vehicles, respectively, reflecting a year-over-year jump of 64% and 73%. The company reported Model 3/Y production and deliveries of 228,882 and 232,102 vehicles, marking year-over-year growth of 79% and 87%, respectively. Meanwhile, the production and delivery of Model S/X plummeted 47% and 39% on a year-over-year basis to 8,941 and 9,289 units, respectively.

Production & Deliveries in Q4

With the Model 3 sedan being its flagship vehicle, Tesla has established itself as a leader in the EV segment. Its products' stellar performance and impressive design are anticipated to have ramped up sales volumes during the quarter under review. Being the first mass-market electric car in North America and Europe, Model 3 is one of the best-selling vehicles. The car’s market-leading safety, performance and impressive specs have made it a huge success. Also, the elevated production and deliveries of the Model Y vehicles are likely to have buoyed the automaker’s earnings during the quarter in discussion.

Tesla reported record-setting fourth-quarter 2021 deliveries, thanks to the soaring popularity of green vehicles and rising preference for personal mobility. In fact, fourth-quarter 2021 marked the sixth consecutive quarter of ground-breaking deliveries by the world's most valuable automaker.

The EV behemoth registered worldwide production and deliveries of 305,840 and 308,600 vehicles, respectively, in the December-end period, way higher than the 179,757 units produced and 180,570 units delivered in the corresponding quarter of 2020. In fact, the delivery count for the fourth quarter smashed the previous high mark of 241,300 set in the third quarter of 2021. The delivery metric also surpassed the Zacks Consensus Estimate of 283,041 units.

Surging demand for Models 3 and Y, which form a major chunk of the automaker’s overall deliveries, can be attributed to Tesla's solid vehicle sales during the quarter. For the quarter in discussion, the Model 3/Y registered production of 292,731 vehicles, while 296,850 vehicles were delivered, reflecting a massive increase from the production of 163,660 units and delivery of 161,650 units during the year-ago quarter. While Model 3/Y production count is on par with the Zacks Consensus Estimate, the delivery count topped the consensus metric of 265,792 units.

For the final quarter of 2021, while the combined Model S/X production count of 13,109 units was in line with the Zacks Consensus Estimate, the reported delivery figure of 11,750 units marginally beat the consensus metric of 10,178 units.

Overall Earnings & Revenue Projections for Q4

The Zacks Consensus Estimate for Tesla’s to-be-reported quarter’s earnings is pegged at $2.02, indicating an increase from the 80 cents posted in the prior-year quarter. The Zacks Consensus Estimate of $15.93 billion for sales calls for a 48.3% surge on a year-over-year basis.

Tesla currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks With a Favorable Combination

Here are some other companies in the auto space, which, according to our model, also have the right combination of elements to post an earnings beat for the quarter to be reported:

General Motors GM has an Earnings ESP of +12.02% and a Zacks Rank #2 (Buy). The stock is set to report fourth-quarter 2021 earnings on Feb 1.

The Zacks Consensus Estimate for General Motors’ to-be-reported quarter’s earnings and revenues is pegged at $1.04 per share and $29.35 billion, respectively. Encouragingly, GM surpassed earnings estimates in the last four quarters, with an average of 46.5%.

Ford F has an Earnings ESP of +6.83% and a Zacks Rank #1. The stock is set to report fourth-quarter 2021 earnings on Feb 3.

The Zacks Consensus Estimate for Ford’s to-be-reported quarter’s earnings and revenues is pegged at 40 cents per share and $35.96 billion, respectively. Encouragingly, F surpassed earnings estimates in the last four quarters, with an average of 335.6%.

Cummins CMI has an Earnings ESP of +0.63% and a Zacks Rank #3 (Hold). The stock is set to report fourth-quarter 2021 earnings on Feb 3.

The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $3.08 per share and $5.78 billion, respectively. CMI surpassed earnings estimates in three of the last four quarters while missing once, delivering an earnings surprise of 8%.

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