Tesla and These 5 Other Stocks Face a Challenging Week of Earnings

Tesla will report earnings on Wednesday. (AFP via Getty Images)

The market may be setting records, but this week’s earnings feature companies that are busy trying to remake themselves, including Tesla , Intel , and Southwest Airlines . Investors will be relieved if their June results aren’t as bad as expected.

Tesla, which reports after Wednesday’s close, may be top of mind for investors. The vehicle maker already disclosed delivery results for its electric cars for the quarter ended in June. At 384,000 units, deliveries dropped 13.5% from the June 2024 quarter—the largest percentage drop in Tesla’s history. Still, that wasn’t as bad as Wall Street expected. The stock’s widely-dispersed ratings average out to a Hold, as analysts fret about soft demand for EVs and CEO Elon Musk’s political distractions.

The company’s June quarter revenue will come in at around $22.4 billion, according to the consensus of analysts tallied by FactSet. That is up from March, but below the June 2024 number of $25.5 billion. Consensus forecasts for earnings are for 40 cents a share, excluding noncash expenses, which would be barely half the 72 cents per share reported in June 2024.

While Musk and his fans are betting the company will reinvent itself with robo-taxis and humanoid robots, EV sales remain essential. On Wednesday’s call, investors hope to learn how demand has responded to the recent refreshment of the Model Y, and when Telsa will deliver the long-awaited affordable models that could be priced around $35,000 each.

Morgan Stanley’s Adam Jonas has remained a bull for two years, and his Buy rating relies on robo-taxis and Optimus robots. “We expect deliveries to remain subdued in [2025’s second half], [down 13% year over year],” he recently wrote, “highlighting the continued strategic importance of robo-taxi rollout and Optimus advancements.”

Sales in the second half may depend on a pull-forward in demand, if buyers try to beat the federal government’s elimination of EV tax credits.

Steel concerns

Steel is another faltering business effected by President Donald Trump’s policies. His June announcement of tariffs on steel imports lifted shares of the steel mill operator Cleveland Cliffs.

But the company has struggled, and Wall Street expects that the June quarter results it announces before Monday’s opening will show a loss of 71 cents a share, excluding noncash costs, compared with an 11 cent profit per share in June 2024. Revenue is expected to come in at $4.86 billion, down from $5.1 billion.

Investors will listen for progress on Cleveland Cliff’s cost-cutting, as it aims to return to positive free cash flow. There’s a big short interest. Martin Englert of Seaport Research Partners thinks that an encouraging earnings call could lead to a short squeeze. His Buy rating is a bet that Cleveland is the industry’s most leveraged bet on successful cost-cutting.

Turbulence ahead?

Two of the airline industry’s underachievers will report before Thursday’s open: American Airlines Group and Southwest Airlines.

Their rivals Delta Air Lines and United Airline Holdings reported better-than-expected results for their June quarters, but UBS analyst Thomas Wadewitz typifies the consensus among analysts, with his Hold rating for American and Southwest, and Buy ratings for Delta and United.

He predicts a 1% drop in June quarter passengers for both American and Southwest. He thinks that revenue per seat mile fell 3.5% at American and 2% at Southwest, with costs some 4% higher at each.

For American, Wadewitz thinks that resulted in June quarter revenue of $14.25 billion, down 0.6% year over year, and cash earnings of 76 cents a share, compared with $1.09 a share in June 2024. The consensus among analysts tracked by FactSet calls for June 2025 earnings per share of 78 cents.

At Southwest, the UBS analyst predicts a June revenue report of $7.3 billion, compared with $7.35 billion in the year-ago quarter. That would leave cash profit of 56 cents a share, versus 58 cents. The consensus forecast for Southwest Air is for a 51 cent a share loss in June, compared with the year-earlier period’s profit of 58 cents.

The airline industry has focused on reducing capacity this year, so Wadewitz will listen for what American and Southwest say about the average seat-miles they plan for the second half of the year.

Key chips

One more industry with important reports this week is the semiconductor business. Texas Instruments reports after trading ends on Tuesday, while Intel reports after Thursday’s close.

Although it is a consensus Hold among analysts, Texas Instruments was recently raised to a Buy by TD Cowen’s Joshua Buchalter, who said the company is his best play on a semiconductor recovery. Street-wide, analysts expect that June quarter sales rose to $4.36 billion, from a year-earlier $3.8 billion. They also predict that cash earnings rose to $1.44 a share, from $1.33.

Intel, however, is expected to report lower sales and profits. The consensus forecasts that June sales fell to $11.95 billion, from $12.8 billion, while cash profit eked out one cent a share, compared with two cents in June 2024.

Morgan Stanley’s Joe Moore has a Hold rating, like most, and he will be listening to what Intel says about its ambitious chip foundry plans. There is wide speculation that the company will shelve its plans to push its process to the advanced geometry known as 18A, and instead content itself to target 14A. He is pessimistic that Intel’s foundries will become profitable in the near future.

Write to Bill Alpert at william.alpert@barrons.com