Tesla Q4 FY2021 Earnings Report Preview: What to Look For

Focus on TSLA vehicle deliveries

Key Takeaways

  • Analysts estimate adjusted EPS of $2.33 vs. $0.80 in Q4 FY 2020.
  • Vehicle deliveries, which Tesla reported earlier this month, rose at a torrid pace YOY.
  • Revenue is expected to rise YOY, but more slowly than the most recent three quarters.

Tesla Inc. (TSLA) continues to post record profits and revenue as demand for electric vehicles (EVs) soars. EV sales doubled in the U.S. last year even amid the pandemic. However, the global auto industry has struggled with supply chain disruptions, including a shortage of semiconductors. Tesla has been one of the most successful automakers in navigating the semiconductor shortage. The EV maker's skilled in-house software engineers have done that by rewriting software to integrate with alternative chips for use in Tesla vehicles.

Investors will be watching to see if Tesla is able to maintain its rapid growth when the company reports earnings on Jan. 26, 2022 for Q4 FY 2021. Analysts expect adjusted earnings per share (EPS) to accelerate from the previous quarter's rapid pace of growth. Revenue is expected to rise at a robust pace, though more slowly than recent quarters.

Investors also will focus on Tesla's vehicle deliveries for the quarter, which the company reported earlier this month. Total deliveries for Q4 FY 2021 jumped 70.9% to 308,600 compared to the same quarter a year ago.

Shares of Tesla have underperformed the broader market over the past year. The stock's performance gap originally widened dramatically in the first four months of the past year. But starting around the beginning of June 2021, that performance gap gradually narrowed until late October when the stock pulled ahead of the market. The stock's movement has been extremely volatile over the past several months and is currently lagging the market. Tesla's shares have provided a total return of 5.6% over the past year, below the S&P 500's total return of 14.4%.

One Year Total Return for S&P 500 and Tesla
Source: TradingView.

Tesla Earnings History

Tesla reported mixed results in its Q3 FY 2021 earnings report. Adjusted EPS beat analysts' expectations, rising 144.3% compared to the year-ago quarter but continuing a deceleration trend begun in the previous quarter. Revenue, on the other hand, missed consensus estimates, but were still up 56.9% year over year (YOY). The company cited semiconductor shortages, port congestions, and rolling blackouts as some of the supply chain challenges keeping its factories running at optimal speed and efficiency.

In Q2 FY 2021, Tesla reported earnings and revenue that surpassed analysts' estimates. Adjusted EPS was up 231.8% YOY, decelerating from the previous quarter's pace of 306.6%. Revenue grew 98.1% compared to the year-ago quarter, the fastest pace of growth since the final quarter of FY 2018. The company noted that its employees worked extra hard to keep production as close to full capacity as possible amid disruptions to global supply chains.

Analysts expect adjusted EPS to increase 190.6% YOY, accelerating from the previous quarter's pace. Revenue is expected to grow 56.3% compared to the year-ago quarter, remaining steady with the previous quarter's pace of growth. For full-year FY 2021, analysts expect adjusted EPS to rise 193.6% and to be positive for the third straight year. Annual revenue is forecast to rise 67.7%, which would be the fastest pace of growth since FY 2018.

Tesla Key Stats
  Q4 FY 2021 Q4 FY 2020 Q4 FY 2019
Adjusted Earnings Per Share ($) 2.33 (estimate) 0.80 0.41
Revenue ($B) 16.8 (estimate) 10.7 7.4
Vehicle Deliveries 308,600 (actual) 180,570 112,000

Source: Visible Alpha; Tesla (Q4 FY 2021; Q4 FY 2020; and Q4 FY 2019).

The Key Metric

As mentioned above, investors will focus closely on Tesla's vehicle deliveries. The company's primary business is making electric cars and it needs to continue expanding production in order to grow revenue and profits. However, the company has faced enormous challenges over the past year related to global supply chain disruptions. Not only has Tesla had to adjust to the global shortage of semiconductors, but its customers have had to deal with longer waits for their vehicles due to shipping bottlenecks. Tesla has had to readjust its promised delivery dates at various points in the year. The company also continues to face rising competition from other producers of EVs, such as Volkswagen AG (VOW3) and General Motors Co. (GM).

The company's strong vehicle deliveries in each of the four quarters of FY 2021 enabled Tesla to boost total annual deliveries by 87.4%. That surpassed Tesla's goal of 50% growth for the year and also represented an acceleration of growth compared to the previous two years. Annual vehicles deliveries rose 49.8% in FY 2019 and then 35.9% in FY 2020. Growth in FY 2021 was especially strong in the first half of the year. Quarterly vehicle deliveries rose 108.8% YOY in Q1 before accelerating to 121.4% YOY in Q2. Growth decelerated to a YOY 72.9% in Q3 and again to 70.9% in Q4 FY 2021.

Article Sources
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  2. The Wall Street Journal. "How Elon Musk’s Software Focus Helped Tesla Navigate Chip Shortage." Accessed Jan. 25, 2022.

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  7. Tesla Inc. "Q3 2021 Update," Page 3. Accessed Jan. 25, 2022.

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  9. Reuters. "Tesla surmounts supply chain woes with blockbuster Q4 deliveries." Accessed Jan. 25, 2022.

  10. CNBC. "Tesla buyers confounded by delivery delays stretching for months." Accessed Jan. 25, 2022.

  11. The Wall Street Journal. "Tesla Posts First Full Year of Profitability." Accessed Jan. 25, 2022.

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