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Tesla Motors, Inc. (TSLA) Message Board

  • temagami67 temagami67 Feb 21, 2013 2:21 PM Flag

    Earnings Discussion

    As it turns out, I underestimated the loss by $21M ($91M versus my estimate of $70M). I expected gross profit to increase by $40M. Instead, it only improved $32.6M due to my overestimation of GM. But what really threw me off was that I expected a slight increase in SG&A and a slight decrease in R&D, effectively cancelling each other out. Instead, they increased a whopping $15M.

    Armed with this info, and some forward-looking statements, let’s take a stab at 1Q13 earnings. Elon stated that R&D will go down substantially and SG&A will go up slightly. For a number of reasons, I expect the changes will pretty much cancel and remain at a total of $115M. I expect revenues to improve by $225M (2250 additional cars at $100k each). That would bring overall revenue to about $530M. Assuming a GM of 15%, that would be a gross profit of about $80M. This leaves an earnings deficit of $35M. They’ll have to do a lot of non-GAAP adjustment to bring this to zero. Either that, or there’s a huge Development Services contract in the offing.

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    • Tema
      AS EV said they will likely be less. $85K? However 2400 + 2250 = 4,650 a bit shy of 5000. May I ask why?
      The Contract seem like a possibility or something like that. Musk seemed too sure they would make it to positive earnings.

      Nomo I heard a rumor that they have delayed the 40kWh version until "Mid Summer" I haven't found that officially yet.

      • 2 Replies to frogfather44
      • Frog, in Telsa's shareholder letter, Elon estmated 4500 deliveries in Q1. I'm thinking he set himself a low target so that he does not underdeliver yet again. So I added 150. Since then, I've updated my "100 block" estimates. I'm seeing VIN blocks 3000-3899 delivered in January and blocks 3900-5799 delivered in February. Since the first week was taken off, that's 2800 cars delivered in 8 weeks, or 350/wk. Every indication is that they're building at 400/wk now, so let's add 1600 cars for March. Surely they won't work Easter weekend. So now I'm only coming up with 4400 cars delivered. The bottom line is that I don't see how they can turn a profit without significant 1-time credtis like ZEV credits or maybe engineering services contracted to a company with deep pockets like Boeing.

      • Tesla 4th Quarter Results Not Good: Earnings And Production Miss, 40 kWh Model S Delayed
        Confirmation no 4kWh version
        Tema Never mind about the number of sales for the Q. It's in the same article.
        A suggestion that they may be profitable due to nearly only producing the 85kWh versions and as few 60s as they can get away with is part of the plan to make the Q profitable.
        However this only works if they sell by March. Bloomberg was told 4 to 6 weeks (Which nearly all would make it. Musk said 6-8 weeks none of which would make it.
        I found a breakdown of expected deliveries this Q as compared to what the implied they would sell this Q.
        Old theoretical scenaro:
        1,500 85 kWh
        2,000 60 kWh
        1,500 40 kWh

        New theoretical scenario for Q1:
        3,500 85 kWH
        1,000 60 kWh

    • ASP of pure automotive sales wont be $100K since they are shipping 60kWh models as we speak. Unless you are including ZEV credits. It will be interesting to see if they break out ZEV credit revenue in the 10K. When is the 10K typically filed?

      • 2 Replies to evsavant
      • "When is the 10K typically filed?"
        In both 2011 and 2012, the 8k was filed on 2/15. The 10Ks were filed 3-3-11 and 2-27-12.. Since the 8k was a week later this year, my guess would be around 3/8/13.

        ZEV credit revenue was identified in prior filings--can't remember if it was 10Ks or possibly in S-1/424b filings.
        IIRC, the ZEV credit deal with Honda ended 12/31/11--I admit to being a bit surprised by it coming up in this 8k.

        I think there is a small chance that Daimler decided to scrap the B Class EV after the Development Services work and just buy some credits--just my conjecture

      • ev, I was throwiing out some numbers trying to imagine what the largest possible revenue number could be. So yes, I have mentally added in ZEV credits, extended warranty, and service contracts. As a result, my $530M revenue number is way, way north of the most optimistic analyst. Still, I show them losing a ton of money. Also, I was calculating revenue as a delta from Q4. Q4 was all 85kWh and included most of the Signatures. So it would probably make more sense to add in all of the additional units at the ASP of the 60kWh cars. So assuming $80k, that would knock the revenue down to $485M. The loss would then be increased by $45M to $80M. Elon must know something that I don't.

    • TG
      Don't forget the "regulatory credits." The letter said they expected "in the second half a much lower contribution from regulatory credits." I also think, because Musk repeated several times they would not be part of the 25% year end target and he avoided a direct question about them in 4Q12, they are part of the reason he can be confident about a 1Q13 profit but waffle on 2Q13 --the other one being they will be delivering lower margin 60 and 40 kwh cars in 2Q13. Non GAAP cost are likely about $15 million. They also had 350 undelivered units built at year end but that probably more a Cash Flow Statement rather income Statement benefit. We’ll know more when the 10k is filed.

      • 3 Replies to n0m0renancy
      • (((( they are part of the reason he can be confident about a 1Q13 profit but waffle on 2Q13 ))

        Good point. The credits are part of the equation plus they have pulled every order for the top of the line cars forward. That means a massive revenue trough once these sales are filled.

      • Could we please talk only GAAP numbers. Anytime management or the board or an analyst wants to use non-GAAP or non-non-GAAP numbers they have an agenda to sell. GAAP numbers are the real state of affairs. That's what gets audited, that's what gets published, and that's what should be talked about. Unless we all just want to make numbers up according to our own rules, which in that case, the year end numbers show a GM approaching 25%, a decreasing SG&A, increasing reservations and at least one week of positive cash flow. Now doesn't that POS smell lovely?

      • Nomore, you make a good point about the regulatory credits. They were so evasive about discussing it that I really have no way to wrap my arms aound it. But yes, it sounded like it would be here today and gone tomorrow. Analysts must really be scratching their heads over earnings forecasts. They were anticipating a loss in Q1, ramping up to better and better earnings through the year. Now what? I know that Kbodie was of the opinion that their first quartrer of full production would be their most profitable. I share that opinion for the same reasons. I don't think they'll ever do better than 1Q13.

        Regarding the 350 undelivered units, it doesn't surprise me that they would have a 1 week inventory of finished goods at any point in time. It's a matter of minimizing the sum of inventory costs and transportation costs. So yes, it's only a cash flow issue.

 
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