2013 Q1 Earnings Report thread

[ShortSlaver]

Lol - are you kidding? close at $65? With 30MM shorts? We are looking at $100+ a share by Friday.

There's likely more than 30m after the last couple days. But I agree, I'm setting my sights far higher than $65 or whatever. The volume tonight was largest in the big numbers. Expect a lot of margin calls and a big rise in prices tomorrow and Friday.

 

[richkae]

Somebody have a transcript of the call?

 

[Todd Burch]

Somebody have a transcript of the call?

http://ir.teslamotors.com

 

[Norbert]

I'm a bit unclear about one thing: After-hours share price went below $70 to $68.3 now, about the time (perhaps a coincidence) when Cory Johnson claimed on Bloomberg that without the warrant reversal, Tesla would not have turned a profit. However the shareholder letter seems to explicitly claim that this is one of the differences between GAAP and non-GAAP accounting, and that Tesla turned a profit by both methods of accounting.

(In any case, the important thing is that demand figures are increasing as well as margins).

 

[ShortSlaver]

I'm a bit unclear about one thing: After-hours share price went below $70 to $68.3 now, about the time (perhaps a coincidence) when Cory Johnson claimed on Bloomberg that without the warrant reversal, Tesla would not have turned a profit. However the shareholder letter seems to explicitly claim that this is one of the differences between GAPP and non-GAAP accounting, and that Tesla turned a profit by both methods of accounting.

(In any case, the important thing is that demand figures are increasing as well as margins).

I wouldn't worry. The volume dropped off after around $70, so it's just stragglers. Tomorrow will be really good most likely.

 

[CapitalistOppressor]

Anyone who has an idea about the high revenue numbers pls post in them in the $562m/WTF thread under investor discussions. After re-reading the letter and stewing for a bit I am starting to think Tesla is sandbagging on its credit revenue by limiting discussion to ZEV credits. No mention of GHG or CAFE, and the description and context they use for the "credits" seems only to apply to the California ZEV program.

If so, then that means $68m in ZEV credits + some additional unknown amount for GHG and CAFE credits. My thesis is that the "unknown" amount is buried in the inflated revenue numbers. But I need alternate explanations for the increased revenue, thus the WTF?? thread.

 

[anticitizen13.7]

Wow, this is great news:biggrin:

My congratulations to Elon Musk and all members of the Tesla team!!!

 

[NuclearPowered]

I'm a bit unclear about one thing: After-hours share price went below $70 to $68.3 now, about the time (perhaps a coincidence) when Cory Johnson claimed on Bloomberg that without the warrant reversal, Tesla would not have turned a profit. However the shareholder letter seems to explicitly claim that this is one of the differences between GAAP and non-GAAP accounting, and that Tesla turned a profit by both methods of accounting.

(In any case, the important thing is that demand figures are increasing as well as margins).

Q1 non-GAAP net income was $15 million, and $11.2 million on a GAAP basis. Non-GAAP basic EPS was $0.13 and $0.10 on a GAAP basis, using 114.7 million weighted shares outstanding. On a fully diluted basis, non-GAAP EPS was $0.12. GAAP diluted EPS was $0.00, as net income has been adjusted to exclude the one-time non-cash gain of $10.7 million from the elimination of our Department of Energy (DoE) warrant liability as required under GAAP.

So on GAAP basis they are profitable by (11.2M - 10.7M). (Unless that second sentence means they have included the warrant liability in the Net income values. It is unclear.) Either way, Cory Johnson is an idiot.

 

[Norbert]

I wouldn't worry.

As far as I can tell, the most negative combination still results in an EPS of $0.0. It seems that in order to arrive at a negative number, Cory Johnson had to subtract a number that also includes the "favorable foreign currency exchange impact". But that's like saying "if the weather had been worse, things would have been been worse". Maybe, but they weren't.

 

[Cosmacelf]

???? The DOE loan warrant was 10.8 million, and the GAAP profit was 11.2 million. They specifically have a line item showing that they had 556 thousand profit not counting the warrant reversal.

You're right, my mistake. They would have been slightly GAAP profitable even without the DOE warrant recapture (but Elon wouldn't have been able to tweet about it partway through the quarter since it would have been close). And the warrant recapture doesn't factor into non-GAAP profitability, so profitable either way.

The most significant things in the Q&A (other than the great Q1 numbers) relates to future sales and future margin improvement. Elon sounded pretty blasé about sales. In fact he said that they really aren't focused on sales. Instead they want to get the margins improved and make sure service is working great first before focusing on sales. Great sentiment, but not one usually hears from a CEO. He slightly increased sales guidance to 21,000 units sold this year, which sounded to me like a conservative number. On the margin side, he sounded pretty confident of hitting 25% margins with ZERO ZEV credits by the 4th quarter. So, if you believe Elon, and at this point, why wouldn't you, the future looks very bright indeed. The other sales related thing he said (why didn't anyone ask what their marketing and sales strategy was?) was that they were going to continue to just rely on their stores as a way of making sales (and of course on us car owners gushing about it). But their existing stores pull in about a million people a year. That's nice! He also expects the pseudo leasing program to pull in more sales.

 

[ShortSlaver]

You're right, my mistake. They would have been slightly GAAP profitable even without the DOE warrant recapture (but Elon wouldn't have been able to tweet about it partway through the quarter since it would have been close). And the warrant recapture doesn't factor into non-GAAP profitability, so profitable either way.

The most significant things in the Q&A (other than the great Q1 numbers) relates to future sales and future margin improvement. Elon sounded pretty blasé about sales. In fact he said that they really aren't focused on sales. Instead they want to get the margins improved and make sure service is working great first before focusing on sales. Great sentiment, but not one usually hears from a CEO. He slightly increased sales guidance to 21,000 units sold this year, which sounded to me like a conservative number.

Total sandbagging and a brilliant move. He gives a nice guidance number but really, 21,000 will easily be beat. They now have a nice number they can beat in the coming quarters. Love it.

 

[ggr]

Nobody knows. But we do know that there are ~30.000.000 shorts that just lost $15/share, so that's roughly US$0.5B down the drain for the shorts. And some of these shorts will be forced to sell and that certainly won't drive the price down.

You mean "forced to buy", but I know what you mean, so that's OK. Or "forced to exit their position" might be even a better way to put it.

 

[ShortSlaver]

You mean "forced to buy", but I know what you mean, so that's OK. Or "forced to exit their position" might be even a better way to put it.

There will be buyers.

 

[ccorda]

These predictions at US/International mix look right if you go by today's numbers:

Officially Official: Tesla Is Top Selling EV Maker In The US, Increases Sales Estimate For 2013

For the second quarter the company says it will sell 4,500 EVs, most of which to the US, which may be good enough to hold down the number 1 spot.
However, far fewer plug-in Teslas will be sold in the second half of 2013, as cars are shipped overseas. How much less comes to us via a timely quote on ZEV credits, with simple math filling in the rest of the picture.

“We expect (ZEV revenue) to decline significantly in future quarters, as ZEV credits will only apply to about 1/6 of worldwide deliveries, versus roughly half of US deliveries, and the price per credit has declined.”
​

That means that on the balance of the 16,100 further sales the company expects to bank, only about 5,500more sales are projected to happen inside the US.In the first quarter, Tesla says it acquired ZEV credits on1 out of every 2 sales made in the US (for sales inside ARB states), and that for the rest of the year it will acquire them, at an average rate of 1 out of 6 sales.
That gives us about 10,000 in total sales inside the US (ex-Canada), leaving Tesla to battle it out with the Toyota Prius plug-in (and maybe Ford’s C-Max Energi) for 3rd place by year’s end.

 

[NigelM]

These predictions at US/International mix look right if you go by today's numbers:

Officially Official: Tesla Is Top Selling EV Maker In The US, Increases Sales Estimate For 2013

Welcome to TMC!

 

[DonPedro]

These predictions at US/International mix look right if you go by today's numbers:

Officially Official: Tesla Is Top Selling EV Maker In The US, Increases Sales Estimate For 2013

Interesting, but this flies in the face of other guidance given by Tesla. They have projected 30k global demand per year and 15k in the US, i.e. 50% (unless one reads "global" as "non-US", which is a stretch). They have also (variably) said that international orders will be filled using 40-50% of production capacity. There must be something else going on in these figures.

 

[Johan]

@ccorda: nice article, thanks! However, how can you know the figure to be 5500??? That's only if you predict a continued identic split of sales between ARB/non-ARB states. The proportion could change. For example I believe in the start that California was heavily represented while other states that had few sales in Q1 will increase in Q2.

 

[VolkerP]

I think we all underestimated TM's innovative potential when taken to the stoxx:

- instead of paying dividends, they make the shorts pay stock holders via lend/borrow rates
- instead of raising capital, they make the other car manufacturers pay via emission credits
- instead of spending money in advertising, they turn their customers into ambassadors that evangelize people and address FUD articles in the net

Pure brilliance. Anyone care to expand this list?

 

[Jonathan Hewitt]

I think we all underestimated TM's innovative potential when taken to the stoxx:

- instead of paying dividends, they make the shorts pay stock holders via lend/borrow rates
- instead of raising capital, they make the other car manufacturers pay via emission credits
- instead of spending money in advertising, they turn their customers into ambassadors that evangelize people and address FUD articles in the net

Pure brilliance. Anyone care to expand this list?

Instead of making their customers pay for the fuel for their cars at gas stations they provide fuel for free from this thing called the sun at superchargers (after paying an up front fixed cost).

 

[CapitalistOppressor]

These predictions at US/International mix look right if you go by today's numbers:

Officially Official: Tesla Is Top Selling EV Maker In The US, Increases Sales Estimate For 2013

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No, actually they don't.

That's just not a credible interpretation of the guidance, let alone the data we have generated on this website. They are hanging their entire report on the "1/6th" multiplier that Elon mentioned. Elon also mentioned that he expected 15,000 U.S. sales this year, which is 50% higher than the report relies upon, and is much closer to the underlying demand that we have derived.

If a person makes two contradictory verbal comments over the course of a 40 minute interview its far more likely that the comment referencing a hard number (15,000) is accurate as opposed to one that requires a complex mental calculation made on the fly (1/6th).

Especially when Tesla would have sold ~9,400 units in the U.S. by the end of Q4 which leaves you with just 600 possible sales for the REST OF THE YEAR. Predicting 10,000 U.S. sales using this reasoning is just absurd.

But its even more patently ridiculous when you consider reservation data. There are under 4,000 reservations for Europe right now. We don't know how many reservations are in the U.S. but we DO know how much reservation money Tesla is holding. At the end of 2012, Tesla had ~$138m in reservation payments, which represented 15,000 worldwide reservations. At the end of March they had ~$130m in reservation payments, despite having delivered 4,900 vehicles in the mean time.

And during Q1 Tesla delivered the 200 Canadian Signature vehicles, which required ~$40,000 to reserve (for a total value of $8m) compared to the normal $5,000. If you account for the $8m in Sig deliveries, the total number of reservations outstanding is basically flat, meaning that Tesla has been getting new reservations at basically the same rate as they have been producing cars, and again the guidance for 2013 reaffirmed that the current reservation rate is ~20k/year.

Given that total reservations are flat (and started at 15k), and that there are fewer than 4000 reservations for Europe (remember that those have been accumulating for years, while there have been nearly 10,000 cars delivered in the U.S. in the last 6 months) and given that its apparent that Tesla has been sustaining a 20k/year reservation rate (with a 20k/year production rate), we know that most new reservations are in the U.S. and there is still a considerable backlog of approximately 10k U.S. reservations at this point. That backlog gets you to 15,000 without ANY additional sales this year (which itself is an absurd prediction).

The rational conclusion is that the 15,000 U.S. sales that Elon cited for 2013 is a conservative estimate. And 10,000 U.S. sales is just wrong.