Tesla beats expectations with $3.4 billion in revenue with it's Q1 earnings call.

[ItsMitch]

Source: https://techcrunch.com/2018/05/02/tesla-earnings-q1-2018/

Tesla has announced it's Q1 earnings today and it's boasting a wild 3.4 billion dollars in revenue. Analysis are also shocked by the cashburn issue that has plagued Tesla for a while was kind of resolved. 

Quote

Tesla  reported its Q1 2018 earnings today, posting adjusted losses of $3.35 per share with revenues on $3.4 billion. This is beat, as analysts expected Tesla to report a loss of $3.48 a share with revenues of $3.22 billion, up from $2.7 billion a year ago. Last quarter, Tesla reported revenues of $3.29 billion. Tesla also ended Q1 with $2.7 billion in cash.

 

In September 2017, Tesla stock hit a record high of $389.61 a share. At market close today, Tesla was trading at $301.15. In after-hours, Tesla is trading around $305.

 

Tesla also provided some updates to its Model 3 production, noting it hit 2,270 cars produced per week for three straight weeks in April.

 

“Even at this stage of the ramp, Model 3 is already on the cusp of becoming the best-selling mid-sized premium sedan in the US, and our deliveries continue to increase,” Tesla CEO Elon Musk and CFO Deepak Ahuja wrote in a letter to investors. “Consumers have clearly shown that electric vehicles are simply more desirable when priced on par with their internal combustion engine competitors while offering better technology, performance and user experience.”

 

Another big issue that Elon and CFO Deepak hit on is the Model 3 production which it seems is improving steadily over time. They plan on taking another 10 days break to resolve critical bottlenecks in the production line. 

Quote

 

Just as Tesla did in Q1, it plans to take planned downtime as part of its Model 3 production process. Prior to the downtime in April, Tesla said it had hit a record of producing 4,750 Model 3 vehicles in two weeks.

 

Once Tesla hits its ideal production rate of 5,000 Model 3 cars per week, which the company expects to do within about two months, the plan is to increase that goal to 10,000 Model 3 cars produced per week.

 

“In the end, this is all about having factories that are producing the world’s highest quality cars as quickly and as cost-effectively as possible, and with as close to zero injuries as we can possibly get,” the investor letter states. “Our automation strategy is key to this and we are as committed to it as ever.”

 

However, Musk has previously said that Tesla over-relied on automation for the production of Model 3 cars. That’s something he still stands by, saying Tesla mistakenly added “too much automation too quickly” early in the process.

 

Elon and CFO Deepak also confirmed that they relied too heavily on full automation which may of costed Tesla valuable time.

 

They went on to say that Model S and X demand is "very strong"

Quote

 

Although much attention has been paid to the Model 3, Tesla said demand for the Model S and Model X is still quite strong. In Q1, Tesla had its highest order number ever, with demand exceeding supply. Tesla said it produced 24,728 Model S cars and X vehicles, while delivering a total of 21,815 of them.

 

“Short-term operational and logistical issues led to an increase in the number of Model S and Model X vehicles in transit to customers at the end of Q1,” the letter states.

 

Looking forward into Q2, Tesla expects Model S and X deliveries to be similar to the ones in Q1. But Tesla said that number will increase in Q3 in order for Tesla to hit its goal of 100,000 deliveries for 2018.

 

Tesla rounded off the Q1 earnings saying that it hopes to become profitable in Q3 later this year, assuming it hits 5'000 Model 3 cars per week. 

 

If you want to fully read their Q1 earning call, you can visit it here:

http://files.shareholder.com/downloads/ABEA-4CW8X0/5453686053x0x979026/44C49236-1FC2-4FD9-80B1-495ED74E4194/TSLA_Update_Letter_2018-1Q.pdf

 

[SpacePeanut]

If only the delivery time wasn't 12-18 months for a Model 3. Recently got a Nissan Leaf instead. Still a great electric car, but just doesn't have a comparable range.

[VanayadGaming]

Just now, SpacePeanut said:

If only the delivery time wasn't 12-18 months for a Model 3. Recently got a Nissan Leaf instead. Still a great electric car, but just doesn't have a comparable range.

that is literally what they are working on right now

[SpacePeanut]

7 minutes ago, VanayadGaming said:

that is literally what they are working on right now

Yeah, I know. Just pointing it out, I guess. Sorry for sounding dumb.

[Tech Enthusiast]

Well, i guess "we can't produce as fast as we are selling our stuff" is not the worst problem to have.

[VanayadGaming]

3 minutes ago, SpacePeanut said:

Yeah, I know. Just pointing it out, I guess. Sorry for sounding dumb.

If they manage 5k by Q2, then maybe they can do 10k by end of Q4. Cars should start shipping much much faster. They still have 450k preorders

[TVwazhere]

17 hours ago, SC2Mitch said:

Tesla rounded off the Q1 earnings saying that it hopes to become profitable in Q3 later this year, assuming it hits 5'000 Model 3 cars per week. 

Is Tesla as a company still technically in the red?

[VanayadGaming]

37 minutes ago, TVwazhere said:

Is Tesla as a company still technically in the red?

If you ask if they turned this quarter a profit, they didn't - around 700mil loss, because of reinvesting in the factories. If you ask if they still have cash on hand. They do, around 2-3bil. They did have some quarters of profit up until now, not many though. They plan to start being profitable this year.

[Guest The Viking]

26 minutes ago, TVwazhere said:

Is Tesla as a company still technically in the red?

yes. By a huge margin. losing money & ows 9 billions.

 

Not sure why OP deleted this sentence:

 

https://techcrunch.com/2018/05/02/tesla-earnings-q1-2018/

 

Quote

Tesla  reported its Q1 2018 earnings today, posting adjusted losses of $3.35 per share with revenues of $3.4 billion. This is technically a beat, as analysts expected Tesla to report a loss of $3.48 a share with revenues of $3.22 billion, up from $2.7 billion a year ago.

Tesla also ended Q1 with $2.7 billion in cash, down from $3.4 billion in cash at the beginning of the year.

from some other article:

https://www.teslarati.com/tesla-q1-2018-earnings-cash-burn-model-3/

 

Quote

Tesla’s first-quarter earnings for 2018 saw the California-based carmaker beat Wall Street revenue estimates after posting $3.4 billion in revenue and beating earnings estimates with a loss of $568 million.

The results, which were posted in an update letter to investors after the closing bell on Wednesday, May 2, showed first-quarter earnings of -$3.35 per share, beating analyst estimates of -$3.58 per share. Revenue was $3.4 billion versus an estimate of $3.22 billion.

 

supposedly depreciation, not sure if that's enough of a justification. Will see I guess.

[BuckGup]

4 hours ago, SpacePeanut said:

If only the delivery time wasn't 12-18 months for a Model 3. Recently got a Nissan Leaf instead. Still a great electric car, but just doesn't have a comparable range.

In the cold the car can only go around 50 miles because they don't have the same controlled environment as Tesla's do for the batteries

[Blackie Sheen]

So finally Tesla is trying to move away from the silicon valley style of business. But seriously, it's so impressive how fast their production growth is. They are getting the industrial production process more and more on point

[Monkey Dust]

4 hours ago, The Viking said:

yes. By a huge margin. losing money & ows 9 billions.

 

Not sure why OP deleted this sentence:

 

https://techcrunch.com/2018/05/02/tesla-earnings-q1-2018/

 

from some other article:

https://www.teslarati.com/tesla-q1-2018-earnings-cash-burn-model-3/

 

 

supposedly depreciation, not sure if that's enough of a justification. Will see I guess.

Yep and a chuck of that 9 Billion of that debt is maturing late this year and next, which will have to be refinanced at less favourable rates as Moody's have downgraded their debt Linky

 

[Guest The Viking]

20 minutes ago, Monkey Dust said:

Yep and a chuck of that 9 Billion of that debt is maturing late this year and next, which will have to be refinanced at less favourable rates as Moody's have downgraded their debt Linky

 

finally people who've properly checked the sources.

 

Tesla will need new funding unless they manage to become extremely profitable all of a sudden (so not just hitting the 5000 cars/week goal but going over that). I don't think it'll be an issue as musk is talented to just find people who'll believe his stuff, but I would get rid of my tesla shares asap and only come back once those 9 billions and the constant cash burn is gone.

[ItsMitch]

5 hours ago, The Viking said:

Not sure why OP deleted this sentence:

 

Didn't delete anything, but thanks for the thoughtful comments. 

[Monkey Dust]

12 minutes ago, The Viking said:

finally people who've properly checked the sources.

 

Tesla will need new funding unless they manage to become extremely profitable all of a sudden (so not just hitting the 5000 cars/week goal but going over that). I don't think it'll be an issue as musk is talented to just find people who'll believe his stuff, but I would get rid of my tesla shares asap and only come back once those 9 billions and the constant cash burn is gone.

Their best hope of survival is stopping development of the truck and the sports car until they are on a more stable financial footing. R&D is huge cash sink they can ill afford right now. Somehow I doubt Mr Musk will do that though...

[zheega]

1 hour ago, The Viking said:

finally people who've properly checked the sources.

 

Tesla will need new funding unless they manage to become extremely profitable all of a sudden (so not just hitting the 5000 cars/week goal but going over that). I don't think it'll be an issue as musk is talented to just find people who'll believe his stuff, but I would get rid of my tesla shares asap and only come back once those 9 billions and the constant cash burn is gone.

Going over their 5000 cars/week numbers doesn't help them at all, since they are making a ~$10k loss per every Model 3 produced. If anything, producing more cars will make their problems worse.

[mr moose]

I heard they only made that much because they stole a $2Bn window. 

[Teddy07]

very overhyped company

[Eaglerino]

Tesla's sounding more and more like a kickstarter that'll never send you your backing as time goes on

[AresKrieger]

I mean Tesla does have the potential to be profitable but they are still in capital building mode, the only question is how much money musk wants to sink without returns. It seems quite clear the answer is a lot so whether it sticks around or not really comes down to time table

[Guest The Viking]

7 hours ago, Monkey Dust said:

Their best hope of survival is stopping development of the truck and the sports car until they are on a more stable financial footing. R&D is huge cash sink they can ill afford right now. Somehow I doubt Mr Musk will do that though...

not sure R&D is their biggest problem

6 hours ago, zheega said:

Going over their 5000 cars/week numbers doesn't help them at all, since they are making a ~$10k loss per every Model 3 produced. If anything, producing more cars will make their problems worse.

that makes more sense. 

 

I guess it's their production line, they supposedly employ 40K people?

 

Seat in Spain has a plant with 12K employees and makes 2000 cars a day, or around 400K a year. Sure, Seat cars are more basic than tesla, but you would think that x3 more employees they could do better?

 

tesla factory's just seem hugely inefficient.

[Guest The Viking]

7 hours ago, SC2Mitch said:

Didn't delete anything, but thanks for the thoughtful comments. 

they may have just edited the article in between you posting & me reading it. It does change the outcome slightly, on one side it looks Tesla just made tons of money and are doing "fine" but once you see they still lost 700 million $ it makes things worse.

 

just found it really weird you copied & pasted the article as it was but that sentence was entirely missing?

[MrDynamicMan]

8 hours ago, Monkey Dust said:

Their best hope of survival is stopping development of the truck and the sports car until they are on a more stable financial footing. R&D is huge cash sink they can ill afford right now. Somehow I doubt Mr Musk will do that though...

It's a huge cash sink but it's also a huge part of their public image, which Tesla is really all about. As long as the public has confidence in Musk, people will keep on buying and pre-ordering, and investors will keep on investing. Say what you will, but at the end of the day Tesla is a lifestyle brand and needs the good PR.

[Monkey Dust]

On 04/05/2018 at 7:34 AM, MrDynamicMan said:

It's a huge cash sink but it's also a huge part of their public image, which Tesla is really all about. As long as the public has confidence in Musk, people will keep on buying and pre-ordering, and investors will keep on investing. Say what you will, but at the end of the day Tesla is a lifestyle brand and needs the good PR.

But the point is that investors are losing confidence in Musk. As soon as debt matures that they can't refinance, because the kind of organizations that buy corporate debt come to regard Tesla as being too risky, they are in serious trouble.

 

Image is important for a company, but a negative cash flow is what kills businesses, not poor image.

 

My bet for Tesla is that they'll have a huge financial meltdown, share price will drop, and Tesla will be acquired by a large, established, car maker. It will live on as the premium electric brand of someone like the VW group, or possibly Geely who have been buying a lot of brands recently and are already pushing quite hard with electric and hybrid vehicles.

[avg123]

Kind of puts in perspective Apple's size! $61.1 Billion vs $3.4 Billion