Tesla Reports Second-Consecutive Profit; CFO Retires Again

Rei writes: Yesterday, Tesla reported their 4th quarter earnings, representing their second consecutive profit. While earnings per share missed analyst expectations ($1.93 vs. $2.20), revenue beat expectations by around $100 million and free cash flow ($910 million) was more than double the First Call consensus of $395 million. Model 3 margins were maintained at an impressive 20% level despite significant reductions in the average sale price in Q4; labor hours fell by 20% in Q4 and 65% in the second half of 2018 alone. With $3.7 billion in the bank, Tesla is now well positioned to repay its $920 million March convertible bond obligations in cash. Severance costs and an increase in inventory in transit due to shipments to Europe and China are expected to hurt Tesla's profits in Q1, but guidance for Q2 onward in 2019 is strong. Highlights planned for 2019 include introduction of faster V3 Supercharging early in the year, Model Y and pickup unveiling in the middle of the year, base Model 3 unveiling in the middle of the year, and full-vehicle production in the under-construction Shanghai Gigafactory by the end of the year -- the first wholly foreign-owned auto plant in China, which has seen extensive governmental support.

Despite a generally positive earnings report and conference call, the atmosphere was soured by the news that Tesla's 11-year Tesla veteran CFO Deepak Ahuja was re-retiring. Having previously retired in 2015, Deepak returned to Tesla in 2017 to replace outgoing CFO Jason Wheeler. Ahuja will remain with the company for several months as CFO and then become a senior advisor, while his protege Zach Kirkhorn fills his role. The market reacted negatively to the news, with Tesla trading down 4.5% premarket.

Comments

Re-retiring

[bill_mcgonigle]

Thanks for the good summary. I read stories this morning along the lines of "Management Shake-Up at Tesla, CFO Out, Replaced by VP of Finance."

I shall now go mark those news sources as "fake news, shorts colluders."

Re: So Rei is our official Tesla investment liason

[AmiMoJo]

If Rei could just be a bit more objective and fair she would be a great source of Tesla info. She clearly spends a lot of time learning everything she can about the inner workings of the company, with some insightful and interesting posts...

But then ruins it by idolizing Musk and their cars to a ridiculous degree. Also their quarterly earnings aren't particularly interesting.

There are some forums where people have really interesting discussions about the current crop of EVs. it's a shame we can't do that there, but it's already polarized into Tesla fans and oil shills.