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Tesla Jumps Despite Missing, Burning Record Cash On Better Than Expected China, Outlook
Moments ago, the most hyped stock in the market announced Q3 results... and missed while burning a record amount of cash; however Musk's contagious optimism once again dominated the outlook and as a result the stock is up by 7% after hours.
The quarter highlights:
- Telsa delivered 11,603 vehicles in Q3
- Q3 non-GAAP gross margin 25.1%, dropping from 29.4% a year ago; adding "we expect non-GAAP Automotive gross margin to decline slightly from Q3"
- The company trimmed its own guidance for full year deliveries from 50,000-55,000 to 50,000-52,000
- Non-GAAP Revenues of $1.24 billion came in line with estimates, although something strange emerged: while non-GAAP revenue rose from Q3 by about $50MM, its GAAP revenue actually declined by $18 million to $937MM. The difference: a surge in "revenue deferred due to lease accounting" which soared from $242MM in Q2 to $307MM in Q3.
- Non-GAAP EPS of $(0.58) missed expectations of a ($0.56) print. GAAP EPS was a disastrous (1.78)
- But most troubling, as usual, was the ongoing cash burn from a company which appears allergic to generating any positive cash flow. At ($595) million in free cash flow, this was the worst cash burning quarter in Tesla history, which supposedly was to be expected with the rollout of the Model X.
The results in charts:
Revenue: both GAAP and non-GAAP:
EPS: both GAAP and non-GAAP
And Free Cash Flow:
And yet, despite what were clearly disappointing historic results, the stock is up 7% after hours. Why? One simple reason: its forecast was as usual, bullish.
- The company sees 17,000-19,000 deliveries in Q4, which was modestly higher than the consensus estimate of 16,500
- It plans to invest $500MM in Q4 raising full year CapEx from $1.5 billion disclosed previously, to $1.7 billion now.
Some more of Musk's infamous bullishness (and blaming production bottlenecks):
Model S production and deliveries are on track to achieve our initial Q4 plan. The primary limiting factor to higher Q4 deliveries is the near term ramp of Model X production, with the biggest constraint being the supply of components related to the second row monopost seats. To eliminate these supply constraints and achieve a better overall outcome, we have brought manufacturing of these seats in-house. In addition we, and some of our other Model X suppliers, are still ramping up and fine-tuning production. These factors add uncertainty to our build plans during Q4, but we feel emphasizing quality is the right decision for our customers.
During the next several quarters, operating leverage should improve with revenue and gross profit both growing faster than operating expenses. Operating expenses should increase slightly in Q4, but reflect a further decline in Model X development expenses, offset by increased costs related to expanding our global sales capability and developing Model 3. We are on track to unveil Model 3 in late March 2016.
But most important was Musk's commentary on China which for many was the biggest wildcard. This is what he said:
In China, our newest major market, Q3 Model S orders increased substantially from Q2, due in part to the opening of two new retail locations. We expect order growth in China to remain strong with more store openings and the recent policy changes in Beijing and other major cities that allow buyers of Tesla vehicles to bypass license plate restrictions.
In short, despite the miss, despite the epic cash burn (Tesla is down to $1.5 billion in Cash or less than 3 quarters in cash), the outlook was ok, and China was not a disaster, and that alone was enough to spook the shorts into a covering spree that at least for the time being has pushed the stock higher by 7%.
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I like that Elon is doing something, but like DeLorean and the steam locomotive in Back to the Future 3, he's going to be a spectacular wreck.
O'Blammie is gonna give the Free Shit Army government subsidized Tesla leases before he leaves office.
To make up for the " If you like your health plan, you can keep your health plan but we are gonna boot fuck you with either your health plan or my new and improved rainbow skittle shitting unicorn bestest plan ever health plan. "
Bullish on the Muskie !!!!!
Here's what's happening in China...
...so many Chinese have bought their FIRST CAR that the traffic jams are epic. I painfully chuckle walking down a street at 6:00PM, knowing I need to be wearing a self contained breathing apparatus, but pridefully exposing my lungs to the beauty of sulpher dioxide, carbon monoxide and nitrogen derivitives --- as I walk faster than any of the traffic is moving.
So, after being stuck in epic traffic jams, some Chinese are deciding..."hey, I should get a Tesla, at least it doesn't cost me gas money as I sit in an epic traffic jam...taking longer to get home than it would take if I crawled on my hands and knees....but that doesn't matter because I have a TESLA now!!"
ps...I love China, I like Chinese people, and I spent years learning Mandarin, so don't take my comments to seriously.
Anyone in China that can affort a Tesla will often have a driver too. A cheap autopilot.
The fact is no Tesla owner has a driver.
Tesla discovered that they needed a more luxurious back seat for the units going to the Chinese market, precisely because the feedback they were getting was that they didn't particularly care to have the driver to be more comfortable in the driver's seat than they were in the back.
As for people saying that Tesla only has 3 more quarters of cash left on hand, they ought to realize the existence of this thing called DEBT, and also realize that with bond yields at a record low, people will kill for the opportunity to hold Tesla bonds, especially compared to the soon-to-be-negative yielding UST they were previously buying for some unknown reason.
Ever wonder if those bastards at 33 Liberty are propping up this environazi-friendly car company ?
Add the SPY/SPX, AAPL, Facebook, Amazon and a few others. Most are dual shiti--zen stocks.
There are so few CEO's that have the vision or willingness to push the envelope that Musk has. The question always comes down to, how much leeway to you give Musk? If there were more like Musk, Tesla would probably be crushed into oblivion, but there aren't.
The truth is, the majority of CEO's are a bunch of pathetic parasites that could not find their way out of an open field with a giant neon sign flashing "The future is over here".
Thank you Federal Reserve for completely destroying progress and enabling the rest of the posers.
Well, having vision is good, actually being profittable is even better.
The question always comes down to, how much taxpayer money has Obola given to zio Musk?
Also how much has the Red Shield Fed pumped up zio Musk and zio Zuckerberg's stocks?
Yeah. China. Lots of Bill...Mill....thousandaires there.
at the very least, the Chinese will build a charging station on every corner of every ghost city.
Can be later converted into suicide stations (Futurama).
I love that Musk magic, he must have been a mighty wizard in a previous life.
I wonder if his magic works on picking up women.
Somewhere PT Barnum is laughing
Somewhere Ken Lay is laughing
Fixed it for you
Tesla jumps because fuck you.
Hey man, if the cars can be desirable even though they catch fire and dont last, why cant the stock be desirable even though the company misses expectations?
Seems to me that if the cars were good and the company well managed, there would be no magic to the story. Who wants that?
How does Consumer Reports go from saying the Tesla S was the best car they ever tested or ever will test forever and ever. A few weeks later they said they cannot recommend buying a Tesla. WTF?? Totally corrupt.
You mean the two or so Tesla's that caught fire after running through two concrete walls at 110 mph or so?
Every year something like 100K cars catch fire in the U.S. but it's only the Tesla's that caught the attention of the media..
At least the Tesla's actively told their participants to get out of the car before the situation was getting more dangerous.
Jim Jones isn't dead - he's working PR at Tesla. Have some kool-aid...
Are they still selling Tesla's?
They're 'delivering' them, probably to parking areas in the middle of nowhere.
They're 'delivering' them, probably to parking areas in the middle of nowhere.
The Tesla S is actually the most carbon intensive car on the road roughly 3X that of the biggest gas guzzling SUV. The batteries if the last as long as they are supposed to are equivalent to 149grams per mile to manufacture. Now this assumes they hold perfect charge and you only drive down hill in perfect 60 degree weather. If you want to run a heater or airconditioner not so much.
The Tesla kool aid drinkers rant on and on about hybrids because they usually have a gas engine. These purists say only an all electrivc Tesla (aka coal car) is green and hybrids are not
The BMW i3 gets a much higher MPGe than a Tesla. The BMW i8 supercar is not far behind the Tesla.
BMW i3 is 117 MPGe, BMW i8 76 MPGe and Tesla 60 MPGe.
http://my.teslamotors.com/forum/forums/model-s-equivalent-mile-gallon-cl...
The two BMW hybrids are apparently a lot "greener."
The Gigafactory that Tesla is building will be completely powered by renewable energy so I bet that will change for the better in the upcoming year or two.
Tesla's CTO, JB Straubel (and whose presentations on YouTube I can only recommend), mentioned during a presentation that they don't even have a fossil fuel powered backup system. They're going for wind/solar/battery only.
........and it is going to be powered by the "Power Wall."............not.....
Musk's genius appears to involve sucking billions of taxpayer-funded startup capital as well as tax credits and rebates, also taxpayer funded. Most of these same taxpayers can't afford the very expensive cars that only the rich can afford. Yep, genius. Wealth transfer from the poor to the wealthy. A perfect liberal. A perfect genius.
You are not very familiar with Tesla's business plan apparently.
It's not about building very expensive cars for only the rich. It's working towards an affordable electric car for people that are not that rich.
Here it is in one easy image:
http://28oa9i1t08037ue3m1l0i861.wpengine.netdna-cdn.com/wp-content/uploa...
Or read:
www.waitbutwhy.com/2015/06/how-tesla-will-change-your-life.html