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Tesla Posts Second Profitable Quarter Ever (bgr.com)
anderzole writes from a report via BGR: Tesla on Wednesday posted its earnings report for the quarter gone by and investors will have a lot to cheer about. While analysts on Wall St. were expecting Tesla to post a loss, Tesla during its September quarter actually posted a profit, and an impressive profit at that. When the dust settled, Tesla posted a quarterly profit of $22 million and EPS of $0.71. Revenue for the quarter checked in at $2.3 billion. Illustrating how impressive Tesla's performance was this past quarter, Wall St. was anticipating Tesla to post a loss amid $1.9 billion in revenue for the quarter. As far as deliveries are concerned, Tesla during the quarter boasted that it achieved record vehicle production, deliveries and revenue. More importantly, Tesla reaffirmed via a shareholder letter that the Model 3 is still on track for a late 2017 release. You can read Tesla's shareholder letter here.
To not forecast the profit very accurately, is a sign that the business is not in control.
A businessman was interviewing accountants he asked each one:
"What is two and two?"
The first said, "Four." He wasn't hired because he was honest.
The second answered, "Five". He wasn't hired because he was incompetent.
The third said, "Whatever you want it to be." and was hired on the spot.
In steady state - no. While plowing a large amount of money into massive factories to pump out the next generation of products - absolutely, yes.
Letter also indicates they installed a 20MW/80MWh battery at SCE's Mira Loma substation. (I think there is a 100 MW gas peaking plant there too though...)
Would be impressive if it wasn't for the fact that Edison was the only place I ever saw Solyndra solar cells before. (Looking at the installation, no wonder they went bankrupt...)
"Fake Market", just as fake as the absurdly low gasoline tax in the US that promotes the use of gasoline, or the absurdly high subsidies for corn to be grown and then converted into ethenol?
I'm perfectly fine with industries being subsidized, especially new tech, especially tech that helps with energy independence (for security), especially tech that helps with (yes I know, not "solving") slowing and then stopping carbon emissions, especially tech that has socio-economic potential benefits to society at large and not just the employees and shareholders of a company(s).
Just admit that you don't like the fact that 19 of the 20 solar companies that the DOE gave grants to succeeded, so you like to grasp onto the one who didn't.
Just admit that you don't like the fact that a company ran by a guy you don't like is succeeding. I admit my biases, but do you?
No, not true. As a company, they have lost money, and I guess if you divide how much they lost (in previous quarters) by how many cars they sold, you could come up with $7000 loss per car.
Of course that's false accounting. If they were a mature company, perhaps such calculations would sort of make sense. But Tesla is growing, investing heavily in new factories and expanding current factories.
Only if you dishonestly count expenses not related to building the cars.
Tesla changes their accounting methods. Dumb money is excited that TSLA is profitable. Smart money has no idea what to make of these numbers but know something smells musky.
As far as I can tell (Yes, I am a forensic accountant) they sold a lot of now-obsolete cars at a big discount and did some other tricks to prop up sales and push Q4 revenue into Q3, Q3 expenses into Q4, etc.
Now, it really doesn't matter if they're profitable or not because they have plenty of money in the bank and $22 million is a rounding error. Except Tesla is trying to buy Solar City. Why? Basically to bail out Elon Musk since Solar City is a turd circling the drain and Elon has a lot of money tied up in it (directly and indirectly through his other company, Space X). A lot of Tesla stock holders recognize this shit for what it is. But if Tesla can eek out a profit, dumb money thinks Elon is a fucking genius and let him buy up Solar City.
Tesla doesn't make money by selling cars. They lose almost $7,000 average on each. They make money selling the carbon credits they earn by building the cars. It's a fake market; heavily subsidized.
Interestingly enough, they still sell cars in other markets where the subsidy you speak of does not exist. And demand still outstripping supply.
So it is not a fake market, it is a distorted market, (artificially shifted supply curve) but it will still be a market if the subsidy is removed (due to the seemingly inelastic demand curve due to people's desire to own status symbols etc).
And how old are the funds in which you invest? Most are older than Tesla, I'd imagine. Give 'em a few years. There will be a tipping point soon, and they've got a good position to take advantage.
Are your investments undergoing literally exponential production and sales curves? Are you unaware that scaleup costs tremendous amounts of money?
"99 dead duelists of Dios on the wall. 99 dead duelists of Dios! Take one's ring, pass it around..."
No. What is fake is ignoring a whole stack of vitally important negative outcomes (and occasionally positive ones) as "externalities" based on an arbitrary set of rules we call economics. Carbon credit schemes etc are simply an attempt to fix this by retro-fitting externalities into the so-called "real" economy by attaching a monetary value to them.
In steady state - no. While plowing a large amount of money into massive factories to pump out the next generation of products - absolutely, yes.
While taking money for cars they haven't started producing or buying components for: No.
Is it still a fun fact if it's neither fun nor a fact?
For the 9 months ending Sep 30 2016, they made $1,150,984,000 (1.1 billion) in revenue selling cars, of which $195,592,000 (0.1 billion) was from ZEV carbon credits.
In fact, they take OUT the carbon credits from their GAAP reporting numbers (what this article refers to) so that their results aren't skewed.
It's right there in black and white in the results: http://files.shareholder.com/d...
Go back to Accounting 101, that's doesn't add much to "profit".
How so? It counts as revenue, does it not? It might not help the balance sheet if it's offset by liabilities, but I don't see why it doesn't improve their statement of cash flow.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
This is false. The car industry likes to say as a joke that the first car costs 1 billion to make, and every other car thereafter costs $1,500 in parts and labor. This is so because design and factory tooling are ultra expensive, but once the line is up and running the costs drop precipitously.
Now, this expression comes from the early 80s, so you need to adjust the figures for inflation, but you get the picture.
What this means is that it takes years to amortize the cost of car design and factory tooling and only in later years of production do you start making money from each model. Tesla's model S has already amortized it's design costs, but not yet their factory tooling costs as until very recently they were still growing by leaps and bounds their plant to meet enormous demand.
In the meantime accounting ignoramuses like yourself can get to say that they are losing $7K per car. Nothing further from the truth.
It helps if you understand how to read financial statements instead of just repeating the statements of others who have an ax to grind.
The per vehicle loss that is often mentioned takes total expenditures minus total revenues and divides by cars sold. While this seems reasonable it does not take into account that much of the expenditures are being invested in growth.
This is sort of like telling your kid to quit their part-time job because the cost of raising them (feeding, housing, educating, etc.) is too high and your family is losing money on every hour they work. The fact of the matter is that they make money at their part-time independent of the cost of raising them. Kids having a part-time job means they may no longer need an allowance and will help prepare them for a full-time job.
The fact of the matter is that Tesla earns a healthy margin on every car they sell, but that margin is not sufficient to cover the investments they are making in building factories need to accelerate growth of the company. If Tesla really lost money on every car sold no institutional investor would include Tesla in their portfolios becasue Tesla would have no path profitibaily. Institutional investors know how to read financial statements and are very intersted in Tesla's potential. http://www.nasdaq.com/symbol/t...
-rd
Tesla sales curves are growing at a factor of 1.5x annually, which is the definition of exponential.
However this will no longer be the case when they ship the Model 3 in late 2017, since at that point sales are expected to grow by a factor of 2x for a couple of years.
hahahaha as if the shareholder data isn't skewed to make the shareholders happy with their investment, and attract more of it. These things get complicated once you start factoring in the loans and the credits and the cost curve and the development and the depreciation...but if I make a widget that costs $10, and I sell it for $7, and you give me $5...that doesn't mean that it's a $3 profit, no matter how you juggle the numbers and depreciate the costs and invest in new factories. At the end of the day, you'll just have more factories churning out more cars you have to sell for less than they cost to make.
I admit that industries that are subsidized to make a profit are not actually profitable and we should stop pretending that they are, simply so you can feel good about it in the morning. Are you capable of an honest evaluation of reality?
and the end of smog days I'll take it. Namby-pamby environmentalism is all well and good, and I'm all for doing something about climate change; but I think the tree huggers distract too much from immediate environmental concerns like clean air and water.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
I dunno. Tesla seems to be doing pretty well selling to rich people in Shanghai, but electric cars are heavily subsidised there. They're ridiculously expensive in Australia and apparently not very popular.
It helps for working capital, cash flow, and for usage of cash but isn't recognized as revenue. It would be noted as a liability called Deferred Revenue.
Upon partial or full delivery, it is partially or fully converted to Revenue. The cost of said delivery would be netted to obtain Profits.
So if they invested in marketing or gave some sort of paperwork about the contract and those are considered costs for delivery of vehical, then a very small part of that DR can be recognized as Rev. It can be netted against the costs and the minor profit can be recognized.
There is a little bit of wiggle room here on the business deciding how much of the liability was fulfilled. But it's not much, and all you accomplish is shifting pennies between quarters.
When presented with facts, complaining that the facts are rigged? Fuck off to Infowars or wherever you morons hang out, but STFU here and let the adults have a conversation.
"I know I will be modded down for this": where's the option '-1, Asking for it'?
Tesla changes their accounting methods. Dumb money is excited that TSLA is profitable. Smart money has no idea what to make of these numbers but know something smells musky.
As far as I can tell (Yes, I am a forensic accountant) they sold a lot of now-obsolete cars at a big discount and did some other tricks to prop up sales and push Q4 revenue into Q3, Q3 expenses into Q4, etc.
Now, it really doesn't matter if they're profitable or not because they have plenty of money in the bank and $22 million is a rounding error. Except Tesla is trying to buy Solar City. Why? Basically to bail out Elon Musk since Solar City is a turd circling the drain and Elon has a lot of money tied up in it (directly and indirectly through his other company, Space X). A lot of Tesla stock holders recognize this shit for what it is. But if Tesla can eek out a profit, dumb money thinks Elon is a fucking genius and let him buy up Solar City.
I just want to point out that the OP is:
1) Claiming to be a forensic accountant
2) online
3) as AC.
4) Framing his position in emotional terms (dumb money, smart money)
5) While showing no specifics. (Tesla changed accounting methods? Using nebulously-defined "tricks"?)
6) For a company whose analysis is largely partisan.
I don't know why people bother reading up on Tesla, news and analysis is all over the map. Price points from $150 to $400 per share, negative/positive outlooks, baldfaced lies about specs, dangers, and recalls, and all absolutely certain of their analysis.
It's almost as if there are large groups of people who would personally benefit from Tesla's success or failure, and who are willing to lie and mislead to bring about that result.
Amazon still hasn't had one.
So I would advice backing SpaceX over whatever Bezos's rocket company is called.
Unicode killed the ASCII-art *
We spent 2 trillion dollars and 4000 lives to protect the oil industry. Heck, overthrowing democratically elected leaders for oil companies is one root cause of the radicalization of the middle east.
I think I can cut clean solar/electric industries a little slack when i consider what we spend t help the oil industry.
Their subsidies are buried so deep in the government, they don't even look like subsidies any more.
But imagine if 5 years from now, Oil demand had dropped another 10% due to electric cars? We'd be a lot less tempted to get involved in foreign entanglements.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Awww how cute, a conservative idiot who can't tell the difference between a cleverly poetic way of calling him an idiot and 'namedropping'.
If you spread bullshit theories that are supported by your ideology but disputed by the actual facts - you must be a conservative. Whether it's creationism, climate-change-denial, tax cuts for the rich, the relationship between gun-laws and mass shootings, the impact of race on police shootings, what REALLY happens when you deregulate things, how to get the best healthcare outcomes for the lowest investment, which race is most likely to kill each other (hint: it's white people, white-on-white murder outstrips all other races by a huge margin), what things actually cost (so they want to cut or avoid things for having a high price despite those things having a NEGATIVE cost [the ROI is higher than the price] and they end up actually cutting revenues when they attempt to cut costs - as with UBI and single payer healthcare), or how a company that is successfully doing something the company's they like told them can't be one is actually making it's money... if you do all that, you must be a conservative.
Which is not to say that there aren't bullshitters and idiots on the left - Jill Stein sadly has gone full retard this year for example, but at least there it's a fringe group - not the fucking party platform !
Unicode killed the ASCII-art *
Oooh, do tell us about this special world in which margin is evaluable as a free-floating number, without reference to either company growth stage or industry sector.
Thanks. That's an honest to goodness informative post.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Well, no they are hugely popular due to beeing excempt from VAT and tax, they are allowed to drive in the bus lane, are allowed free parking in public parking spaces and are exempt from toll charges. For somone who drives 20000 miles annually including through Oslo on a daily basis a tesla model S can be cheaper than a skoda octavia here. The cost of energy (Wether it is gasoline or electricity) is very minor compared to other charges
"Fake Market", just as fake as the absurdly low gasoline tax in the US that promotes the use of gasoline, or the absurdly high subsidies for corn to be grown and then converted into ethenol?
OK, subsidies I get - those are fake. The Government is artificially covering the costs of something to make it cheaper to buy. But a fake market from taxes? What - the Government is not adding enough EXTRA costs to slow down the market? Adding a cost doesn't make something more attractive to buy...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Yes, more or less. Gasoline is not taxed NEAR enough to cover all the hidden costs associated with using it. Electric cars would be more attractive and need less subsidy if gasoline cars were paying enough fuel tax to cover all the things government does to provide hydrocarbon fuels. Some time ago a left-leaning publication had an interesting article stating EU taxes on fuel were TOO LOW and they really needed to be sending $1 a gallon to the USA to cover some of the cost of keeping the sea lanes open for oil imports to the EU.
I bet you can't provide a single shred of proof to either of those claims.
Maybe you should ask Consumer Reports who rated it the best car they have ever tested and recommend you buy one?
Uh, Tesla IS making the major investments to ramp up both existing production and getting ready for the Model 3. This is precisely why they've been marginally profitable for so long, they are plowing just about every cent into capital investments. Does anyone even look at the financial statements before spouting off and offering their uninformed opinion?
When a loss is expected by literally everyone? Yes. You did read the article right? Or even the single paragraph here?
We spent 2 trillion dollars and 4000 lives to protect the oil industry.
I think the cost of US policy in the Middle East over the last half century is much higher.
The Daddy casts sleep on the Baby. The Baby resists!
I know lots of people that would like to have a Tesla. Not a single one because it's a status symbol. People who want status symbols want something that looks flashier and growls. People want Teslas because they are tech geeks, and it's an early taste of the cars f the future.
What a turd. Faced with the facts that prove his claim completely wrong, he calls the facts lies.
No...it is the second quarter, EVER, in which Tesla reported a profit. They don't mean second "most" profitable, they mean the second with any profit at all.
Almost makes me feel back in the 00's when companies made real things and added real value and then were rewarded appropriately.
I have no idea what the hell is going on with the markets anymore. I was honestly expect Tesla stock to drop for *cynical wall st reasons*
-K
Back then, it was probably just tech companies still making real things. Everything else had probably already been shipped overseas.
Of course soon after, it seems like all the big tech companies just spun-off, outsourced, or divested their "actually building products" divisions to transform themselves into nebulous "enterprise solutions providers."
Cash flow does not indicate profit. Profit is revenue minus expenses and short term liabilities. Accepting cash for services you are promising in the future will increase your cash flow, it will increase your revenue, but it will also add a new short term liability called "unearned income" (revenue for which you have a future obligation) and your profit will not be impacted by the transaction. Once you start purchasing the materials to satisfy the unearned income, you add expenses (negative cash flow) but remove an equivalent portion of the unearned income until you eventually satisfy the liability and can then report the remainder as profit.
I know right? And if we didn't NEED the oil, the knockon effects would be tremendous.
The price of oil would plummet.
The funding backing terrorists would plummet.
We would lose interest in fighting over it.
Sure- oil will continue to be a valuable resource indefinately, but no more so than other resources like iron, aluminum, and copper.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
I know lots of people that would like to have a Tesla. Not a single one because it's a status symbol
Yeah, I want one and not because it's a status symbol.
It's because I could sell it and buy a house instead.
Oh.
Wait...
I've fallen off your lawn, and I can't get up.
Always trying to cap someone. What does your angst stem from, you spoor fellow? Lichen or not, you're looking a little green around the gills these days.
I've fallen off your lawn, and I can't get up.
An AC said:
Your figures are wrong - multiply that 2 trillion number by 4 and you'll get the cost of military operations in the Middle East since the Oil Crisis.
Oil dependence has been a disaster for the United States.
---
I couldn't agree more but I was focusing ONLY on the most recent waste of lives and taxpayer dollars.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Is it still a fun fact if it's neither fun nor a fact?
For the 9 months ending Sep 30 2016, they made $1,150,984,000 (1.1 billion) in revenue selling cars, of which $195,592,000 (0.1 billion) was from ZEV carbon credits.
You may wish to review basic mathematics. $1,150,984,000 rounds to $1.2 billion, $195,592,000 rounds to $0.2 billion.
No; exponential growth means that the growth rate increases as the sales base increases. "...growing at a factor of 1.5x annually" implies a steady, not exponential, growth rate.
Dude, check wikipedia:
https://en.wikipedia.org/wiki/...
For this case we have r=0.5
Your stated formula was 1.5x , which is a linear formula - there are no exponents. Are you using a different formula now?
1.5x every year. So first year your sales are 1.5x, next year they are 1.5 * 1.5 = 1.5^2.
The year after is 1.5 * 1.5 * 1.5 = 1.5^3
In year n, your sales are 1.5^n
That's how growing sales by a factor of 1.5x every year is exponential growth.
I stand corrected.
I was truncating out of laziness, not rounding, but you are correct. Thanks!
Not that it matters - the difference in precision does not reduce your argument's overall validity.