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Tesla could actually report a profit for the third-quarter

Tesla will report third-quarter earnings after the markets close on Wednesday, and then follow with a conference call for analysts.

What should be be looking for? The chatter about what analysts expect ranges from a loss — which would be nothing new — to modest profit.

The keys things investors will be focusing on:

Do more deliveries mean profits?

Tesla delivered 24,500 vehicles in the third quarter, its best ever, and the company said that it would be able to make its second-half guidance of 50,000 deliveries, hitting the low end of its full-year guidance of 80-90,000. More cars sold means more revenue, and at some point increased production, if it serves growing demand, will yield profits. But a few factors could undermine that happy condition.

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Tesla could be spending more than it takes in, obviously, to ramp up Model X SUV production and bring its Nevada battery factory online.

Tesla could also be spending more than it wants to build the cars it has delivered.

Either factor could hurt the company's quest for profitability.

Guidance for the rest of 2016

Tesla will have to top Q3 for deliveries if it wants to make its guidance for the full year. A problem in the past for the carmaker has been the challenge of physically delivering vehicles when the winter weather turns bad in some regions.

On the plus side, Tesla has about 5,000 vehicles in transit in Q3 that won't be counted as deliveries until Q4.

Investors will want assurances that Tesla won't miss on predicted deliveries as the year closes out.

The SolarCity drag

Tesla is aiming to merge with struggling solar-panel installer SolarCity, whose CEO is Tesla CEO Elon Musk's cousin.

The deal will cost Tesla $2.6 billion in stock and add billions in debt to Tesla's balance sheet. Investors will want to know how how Musk and his team plan to deal with the complexities of combining the two companies financially.

But they'll also want to know if SolarCity is going to become a colossal distraction for Musk who will likely become a sort of de facto CEO while he's striving to bring the Tesla Model 3 mass-market vehicle to market by late 2017 ... and in his capacity as CEO of SpaceX, organize a manned mission to Mars.

It's going to be one the livelier Tesla earnings reports we've seen for a while.

NOW WATCH: A 13-year-old kid explains why Tesla is the best car



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