T esla earnings could accelerate stock gains

For Tesla, 2013 could be the benchmark year the electric car maker has longed for, with its performance driving its share price to new highs. The stock is already up 12% year-to-date ahead of  Tesla’s fourth-quarter earnings report Wednesday afternoon.

Back on Nov. 5, Tesla TSLA +0.31% called the third quarter a “fundamental turning point” for the company as it was rolling its Model S sedans off its Silicon Valley assembly line faster than ever before.

Production was expected to reach 400 cars a week in December, up from 100 on Sept. 30.

Tesla expects to manufacture 20,000 Model S sedans this year. That number will be in focus Wednesday afternoon. The company has pegged its 2013 gross margin target of 25% on that production goal, along with its hopes of being a positive free cash flow company.

Tesla needs to start generating consistent cash flows to fund its business. Since going public in June 2010, Tesla has resorted to two secondary stock sales with the help of Goldman Sachs to raise $348 million.

Analysts estimate Tesla will produce cash flow from operations of $149.5 million this year, according to FactSet. They figure Tesla will start to turn a modest profit in the June quarter.

That would be huge for Tesla, which has racked up quarterly losses ever since its IPO.

For the 2012 fourth quarter, analysts forecast the company will lose 58 cents a share. Revenue is pegged at $306.6 million, the latest FactSet survey shows.

Analysts project Tesla will lose 2 cents a share in 2013. Revenue is seen at $1.7 billion.

Here are some company projections to watch closely when Tesla reports:

• Q4 gross margin of 12.5%.


• Q4 Model S deliveries of 2,500-3,000.


• Cash flow positive end of Q4.


• Q4 be “new high water mark” in Model S reservations, currently at 13,000.


• 2012 Sales $400M-$440M.


• European deliveries of Model S signature series before June 30