Tesla TSLA is slated to release third-quarter 2024 results on Oct. 23, after the closing bell. The results will primarily center around the company’s vehicle deliveries and profit margins. 

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TSLA missed earnings estimates in each of the trailing four quarters, the average negative surprise being 7.99%. Before we delve into the factors that are set to shape its upcoming results, here’s a snapshot of its second-quarter 2024 earnings report.

(Also read: A Comprehensive Look at Tesla's Q3 Earnings Expectations)

Tesla’s Q2 Highlights

In the second quarter of 2024, the electric vehicle (EV) titan reported earnings per share of 52 cents, which declined from the year-ago figure of 91 cents and also missed the Zacks Consensus Estimate of 62 cents. Total revenues came in at $25.5 billion, witnessing year-over-year growth of 2%. The top line also topped the consensus mark of $25.1 billion.

Tesla’s second-quarter production totaled 410,831 units (386,576 Model 3/Y and 24,255 other models), down 14.1% year over year. The company delivered 443,956 vehicles, reflecting a year-over-year decline of 5%. The Model 3/Y registered deliveries of 422,405 vehicles, down 5.5% from the year-ago period. Deliveries of the other models totaled 21,551 units, up 12.1% year over year.

Tesla had cash/cash equivalents of $30.7 billion as of June 30, 2024. Long-term debt and finance leases, net of the current portion, totaled $5.48 billion, up from $2.86 billion as of Dec. 31, 2023. The company generated FCF of $1.34 billion during the reported quarter, which rose from $1 billion generated in the year-ago period.

Q3 Delivery Growth to Aid TSLA Amid Shrinking Margins

The company delivered 462,890 units during the third quarter. After experiencing two consecutive quarters of a year-over-year decline, Tesla’s deliveries finally rose in the third quarter. The delivery numbers rose 6.4% and 4.3% on a yearly and sequential basis, respectively. However, it missed our model projection of 471,559 units.

Tesla’s Model 3 and Y are the company’s most successful EVs, accounting for most of its sales. During the quarter, Tesla delivered 439,975 of those, up 5% year over year. Deliveries of other models rose to 22,915 units, up 43.4% year over year.

Fueled by the delivery surge, our forecasts imply 13.1% year-over-year growth in automotive revenues, projecting the metric to reach $22.19 billion.

However, high production costs and aggressive price cuts across models are weighing on the company’s margins. We project the cost of automotive sales to rise more than 13% to around $18.1 billion. Automotive gross margin (excluding leasing) is projected at 17.7%, down from 18.2% recorded in the year-ago period and 17.8% in the second quarter of 2024.