2017Q1 results

[30seconds]

here's a table with what i think are the actual results shown at the top. note that the actual report is actually worse than most of the estimates. i'm shocked the stock is not down, and if i were short, i'd be wondering what it takes to get the stock down.

This is a growth stock,not an earnings stock at this point. If Tesla is growing top line and continues to invest free cash into new growth products (Y, Roadster, Semi, Roof, Storage) then the only thing that is going to push it down is a downturn in sales combined with an inability to curtail spend.

Every dollar of earnings to me signals that they don't know how to invest it.

 

[luvb2b]

side-by-side my model vs. actual numbers. in the actual numbers i had to guess at some of the breakdowns which were not provided in the letter.

line item	q1 17 luv's est	q1 17 act.	q4 16 act.	q3 16 act.
ls veh % total
avg price
revenue
auto sales
auto leasing
1 time autopilot
zev credits
total auto
energy storage
solarcity
grohmann
services/other
total revenue
cost of revenue
auto
auto leasing
total auto
energy storage
solarcity
grohmann
services & other
total cost of rev
gross profit[/B]

[TD2] 0.25 [/TD2][TD2] 0.26 [/TD2][TD2] 0.25 [/TD2][TD2] 0.32 [/TD2] [TD2] 105.40 [/TD2][TD2] 107.27 [/TD2][TD2] 103.28 [/TD2][TD2] 105.40 [/TD2] [TD2]1,976,250[/TD2][TD2]1,985,425[/TD2][TD2]1,719,609[/TD2][TD2]1,778,901[/TD2] [TD2]239,274[/TD2][TD2]254,540[/TD2][TD2]254,674[/TD2][TD2]231,285[/TD2] [TD2]44,000[/TD2][TD2]49,635[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]126,800[/TD2][TD2]0[/TD2][TD2]19,840[/TD2][TD2]138,541[/TD2] [TD2] 2,386,324 [/TD2][TD2] 2,289,600 [/TD2][TD2] 1,994,123 [/TD2][TD2] 2,148,727 [/TD2] [TD2]70,928[/TD2][TD2]50,000[/TD2][TD2]47,285[/TD2][TD2]23,334[/TD2] [TD2]200,000[/TD2][TD2]163,944[/TD2][TD2]84,100[/TD2][TD2]0[/TD2] [TD2]17,000[/TD2][TD2]17,000[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]200,357[/TD2][TD2]175,726[/TD2][TD2]159,123[/TD2][TD2]126,375[/TD2] [TD2] 2,874,609 [/TD2][TD2] 2,696,270 [/TD2][TD2] 2,284,631 [/TD2][TD2] 2,298,436 [/TD2] [TD2]1,537,108[/TD2][TD2]1,496,649[/TD2][TD2]1,372,604[/TD2][TD2]1,355,102[/TD2] [TD2]157,535[/TD2][TD2]166,026[/TD2][TD2]171,818[/TD2][TD2]161,959[/TD2] [TD2] 1,694,643 [/TD2][TD2] 1,662,675 [/TD2][TD2] 1,544,422 [/TD2][TD2] 1,517,061 [/TD2] [TD2]74,474[/TD2][TD2]50,000[/TD2][TD2]60,779[/TD2][TD2]24,281[/TD2] [TD2]140,000[/TD2][TD2]101,773[/TD2][TD2]67,000[/TD2][TD2]0[/TD2] [TD2]16,150[/TD2][TD2]17,000[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]206,368[/TD2][TD2]196,876[/TD2][TD2]177,152[/TD2][TD2]120,359[/TD2] [TD2] 2,131,635 [/TD2][TD2] 2,028,324 [/TD2][TD2] 1,849,353 [/TD2][TD2] 1,661,701 [/TD2] [TD2]742,974[/TD2][TD2]667,946[/TD2][TD2]435,278[/TD2][TD2]636,735[/TD2] [TR][/TR]
[TR][TD]auto gaap gm[/TD][TD2]29.0%[/TD2][TD2]27.4%[/TD2][TD2]22.6%[/TD2][TD2]29.4%[/TD2][/TR]
[TR][TD]opex[/TD][/TR]
[TR][TD]tesla r&d[/TD][TD2]250,000[/TD2][TD2]292,040[/TD2][TD2]234,960[/TD2][TD2]214,302[/TD2][/TR]
[TR][TD]tesla sg&a[/TD][TD2]370,000[/TD2][TD2]458,455[/TD2][TD2]365,909[/TD2][TD2]336,811[/TD2][/TR]
[TR][TD]1time acq cost[/TD][TD2]0[/TD2][TD2]0[/TD2][TD2]15,807[/TD2][TD2]0[/TD2][/TR]
[TR][TD]solarcity r&d[/TD][TD2]30,000[/TD2][TD2]30,000[/TD2][TD2]11,000[/TD2][TD2]0[/TD2][/TR]
[TR][TD]solarcity sg&a[/TD][TD2]145,000[/TD2][TD2]145,000[/TD2][TD2]74,300[/TD2][TD2]0[/TD2][/TR]
[TR][TD]total opex[/TD][TD2]795,000[/TD2][TD2]925,495[/TD2][TD2]701,976[/TD2][TD2]551,113[/TD2][/TR]
[TR][/TR]
[TR][TD]op income[/TD][TD2]-52,026[/TD2][TD2]-257,549[/TD2][TD2]-266,698[/TD2][TD2]85,622[/TD2][/TR]
[TR][/TR]
[TR][TD]interest inc[/TD][TD2]3,000[/TD2][TD2]3,090[/TD2][TD2]2,179[/TD2][TD2]2,858[/TD2][/TR]
[TR][TD]interest exp[/TD][TD2]-50,000[/TD2][TD2]-50,000[/TD2][TD2]-43,104[/TD2][TD2]-46,713[/TD2][/TR]
[TR][TD]scty interest[/TD][TD2]-65,000[/TD2][TD2]-49,346[/TD2][TD2]-22,000[/TD2][TD2]0[/TD2][/TR]
[TR][TD]other income exp[/TD][TD2]0[/TD2][TD2]-18,098[/TD2][TD2]32,524[/TD2][TD2]-11,756[/TD2][/TR]
[TR][TD]1time scty gain[/TD][TD2]0[/TD2][TD2]0[/TD2][TD2]88,700[/TD2][TD2]0[/TD2][/TR]
[TR][TD]pretax income[/TD][TD2]-164,026[/TD2][TD2]-371,903[/TD2][TD2]-208,399[/TD2][TD2]30,011[/TD2][/TR]
[TR][TD]income tax[/TD][TD2]12,000[/TD2][TD2]25,278[/TD2][TD2]11,070[/TD2][TD2]8,133[/TD2][/TR]
[TR][TD]net income[/TD][TD2]-176,026[/TD2][TD2]-397,181[/TD2][TD2]-219,469[/TD2][TD2]21,878[/TD2][/TR]
[TR][TD]non-cont int.[/TD][TD2]-275,000[/TD2][TD2]-66,904[/TD2][TD2]-98,132[/TD2][TD2]0[/TD2][/TR]
[TR][TD]net inc to common[/TD][TD2]98,974[/TD2][TD2]-330,277[/TD2][TD2]-121,337[/TD2][TD2]21,878[/TD2][/TR]
[TR][/TR]
[TR][TD]basic shares[/TD][TD2]163,000[/TD2][TD2]162,129[/TD2][TD2]155,024[/TD2][TD2]148,991[/TD2][/TR]
[TR][TD]diluted shares[/TD][TD2]163,000[/TD2][TD2]162,129[/TD2][TD2]155,024[/TD2][TD2]156,935[/TD2][/TR]
[TR][/TR]
[TR][TD]diluted eps[/TD][TD2]0.61[/TD2][TD2]-2.04[/TD2][TD2]-0.78[/TD2][TD2]0.14[/TD2][/TR]

 

[schonelucht]

they changed the definition of non-gaap gross margin to now include stock comp and zev, where before it was zev only that drove the difference. maddening!

Non-GAAP was always without stock compensation.

WRT ZEV credits, I continue to think it just wasn't the right time to sell. Or maybe that Tesla's visibility and guidance on gross margin simply isn't very good.

Hope the stock holds up well enough that not too many overeager longs with a lot of leverage get a margin call...

I'll do a bigger post mortem of my own analysis tomorrow. It's getting late.

 

[luvb2b]

you're right. i missed that on non-gaap margins. just went back and checked and see i was reading the boldface lines and not the fine print.

i hope so too... but i think tomorrow they are going to flush a lot of options and leveraged longs, mine included.

Non-GAAP was always without stock compensation.

WRT ZEV credits, I continue to think it just wasn't the right time to sell. Or maybe that Tesla's visibility and guidance on gross margin simply isn't very good.

Hope the stock holds up well enough that not too many overeager longs with a lot of leverage get a margin call...

I'll do a bigger post mortem of my own analysis tomorrow. It's getting late.

 

[FluxCap]

before the moment of truth i want to thank @surfside, @neroden, @brian45011, and anyone else i missed who made contributions to this thread.

i have wagered significantly that the research produced here is better than anything else that we've seen published. i feel really good about our efforts, but i know the market reaction is what determines the p&l.

good luck all.

Great analysis indeed, keep it up guys!

 

[neroden]

OK, I'll tell you the things which jumped out at me.
(1) There are still purchase accounting adjustments for the SolarCity merger? In *Q1*? $100 million? Aren't they supposed to do all of those in the quarter they do the merger? Looks like this is going to be muddling up the books for quite a while... I think an expert in purchase accounting for mergers is needed to comprehend this.
(2) The NCIs were just as unpredictable as I thought. Really we won't find out the true state of these until they're all off the books in 25 years, or perhaps when the accounting change happens in the next two years. They seem to fluctuate wildly. It's not a good accounting method. Though the cash flow is actually just as mystifying -- look at "net cash flows from noncontrolling interests", way higher in Q4 than in Q1 (probably depends on the age of the lease portofolio in a complex way). I hope after Model 3 is released, those numbers will swamp the size of these.
(3) I was right about the ZEV credits.
(4) I was wrong about Autopilot revenue recognition.
(5) Interest paid is way up. This is basically adoption of SolarCity debt payments for a whole quarter instead of part of a quarter, I think.
(6) The exchange rate hurt. I think none of us were estimating that factor; I certainly wasn't.

Looking at the earnings statement overall, revenue is up, gross profit margin is up, R&D and SG&A are up but by less, so the core business is looking to have about the same loss rate as it did each quarter last year. The big changes are in the non-operational side. Some of this is meaningless purchase accounting.

The cash flow statement is good; cash used in operating activities is way down. Actual capex is flat.

More problematic is expenditures on leased solar systems, which are *up*. These are the ones where Tesla's providing the financing, which is bad. Tesla's collateralized borrowing is down which means their exposure to financing operations is higher in Q1 than Q4. We want collateralized borrowing to exceed "payments for the cost of solar energy systems, leased or to be leased" as that indicates outside financing for the leases; they achieved this in Q4 and not in Q1. So this is quite clearly SolarCity exerting a drag on the cashflow statement, and a dangerous one. They're still trying to switch from leasing to owning, but they're apparently only up to 31% in Q1, so I guess it's taking a while.

I reallly wish pooling-of-interests accounting was still legal as it would have made more sense than the purchase accounting.

P.S. Actually, I'll repeat the insight which I think is important. We can judge the degree to which Tesla is prefinancing the solar leases (as they need to to avoid bank-run risk and cash depletion) by comparing the "payments for the cost of solar energy systems, leased and to be leased" and the "collateralized borrowing". Very rough since there's other stuff in the collateralized borrowing but it does give a sense.

I do wonder if the Kauai project is having an outsized effect on the spending on to-be-leased solar systems, since they're just finishing it up in Q1 but it won't be deployed until Q2. I suspect it hasn't been monetized (i.e. it's Tesla-financed at the moment), which is undesireable.

 

[neroden]

Regarding the "color" in the letter, it's becoming apparent that the SolarCity integration/restructuring is nowhere near done. They're just now ending the door-to-door sales (in April!) and just starting to roll out solar salespeople in all the Tesla stores (in April!). The Solar Roof tiles will only be in test production in Q2, probably not in full production until late Q3 or Q4. SolarCity is still 69% leasing, which is highly undesirable. Also as I noted previously they are still not monetizing / maturity-matching the leases fast enough.

I'm not expecting us to see this straightened out for Q2; SolarCity will still be a drag for Q2. Maybe it'll be reorganized by Q3.

 

[TheTalkingMule]

We just spent 18 months talking about how the SCTY finance and sales systems were unsustainable. It was pushing the entire industry forward, in line with the master plan, but showing zero net cash and potentially far less than zero in new markets. Now they're TSLA and it's pretty clear that offloading future revenue streams can be facilitated at will.

Shutting down operations entirely and nixing 50% of the operation(sales) is going to take time to process. Just like when Nevada sabotaged the industry for 6 months. TSLA will need to back out of the previous sales method and into the new dynamic of online referrals. Smells to me like we're about there and just waiting on announcement of the new sales dynamic.

I mean....who wouldn't buy an M3 + solar + battery all for less than what you pay now? This is an energy company.

 

[luvb2b]

@neroden the 100 million in adjustments you reference is poorly written in the letter, that's the differential from q4 to q1. q4 had 88 million gain, q1 has 11.x million loss. swing is 100 million.

in reviewing where i went wrong, i came to the conclusion @DaveT was right. there were too many one-time oddities to forecast well. basically i ran into problems in 3 areas:

1. i convinced myself of zev credit sales based on the guidance. i assumed guidance in the q4 letter was well thought out, and clearly it was somewhat haphazard. lack of zev credits = 124m surprise against me. the rest of the sales execution was fantastic and my model on the revenue side was pretty good otherwise.

2. one time expenses of 67m related to the acquisitions and dispositions showed up in opex. i had not modeled this at all. 67m surprise against me.

3. the solar city business was driven off a cliff. from 245 mw deployed in q1 16 down to 150 mw deployed. the nci's came in lower than anything in the last 9 quarters. vs. my model of 275m in nci's, the 67m actual figure is a 208m surprise against me.

the 4 biggest takeaways i had were:

1. operational excellence was shown. gross profit tracked ahead of my model except for zev credits.

2. they are spending gobs of money on opex, i think related to model 3 preparation.

3. solarcity is being reworked dramatically.

4. they seem to be experiencing some model s/x demand flattening, from the comments on the conference call.

OK, I'll tell you the things which jumped out at me.
(1) There are still purchase accounting adjustments for the SolarCity merger? In *Q1*? $100 million? Aren't they supposed to do all of those in the quarter they do the merger? Looks like this is going to be muddling up the books for quite a while... I think an expert in purchase accounting for mergers is needed to comprehend this.
(2) The NCIs were just as unpredictable as I thought. Really we won't find out the true state of these until they're all off the books in 25 years, or perhaps when the accounting change happens in the next two years. They seem to fluctuate wildly. It's not a good accounting method. Though the cash flow is actually just as mystifying -- look at "net cash flows from noncontrolling interests", way higher in Q4 than in Q1 (probably depends on the age of the lease portofolio in a complex way). I hope after Model 3 is released, those numbers will swamp the size of these.
(3) I was right about the ZEV credits.
(4) I was wrong about Autopilot revenue recognition.
(5) Interest paid is way up. This is basically adoption of SolarCity debt payments for a whole quarter instead of part of a quarter, I think.
(6) The exchange rate hurt. I think none of us were estimating that factor; I certainly wasn't.

Looking at the earnings statement overall, revenue is up, gross profit margin is up, R&D and SG&A are up but by less, so the core business is looking to have about the same loss rate as it did each quarter last year. The big changes are in the non-operational side. Some of this is meaningless purchase accounting.

The cash flow statement is good; cash used in operating activities is way down. Actual capex is flat.

More problematic is expenditures on leased solar systems, which are *up*. These are the ones where Tesla's providing the financing, which is bad. Tesla's collateralized borrowing is down which means their exposure to financing operations is higher in Q1 than Q4. We want collateralized borrowing to exceed "payments for the cost of solar energy systems, leased or to be leased" as that indicates outside financing for the leases; they achieved this in Q4 and not in Q1. So this is quite clearly SolarCity exerting a drag on the cashflow statement, and a dangerous one. They're still trying to switch from leasing to owning, but they're apparently only up to 31% in Q1, so I guess it's taking a while.

I reallly wish pooling-of-interests accounting was still legal as it would have made more sense than the purchase accounting.

P.S. Actually, I'll repeat the insight which I think is important. We can judge the degree to which Tesla is prefinancing the solar leases (as they need to to avoid bank-run risk and cash depletion) by comparing the "payments for the cost of solar energy systems, leased and to be leased" and the "collateralized borrowing". Very rough since there's other stuff in the collateralized borrowing but it does give a sense.

I do wonder if the Kauai project is having an outsized effect on the spending on to-be-leased solar systems, since they're just finishing it up in Q1 but it won't be deployed until Q2. I suspect it hasn't been monetized (i.e. it's Tesla-financed at the moment), which is undesireable.

 

[DaveT]

I think us retail investors are getting hurt because we don't have access to "call backs" that analysts have. They also have a line open with IR as well that we don't have. My guess is that probably (maybe?) there was NCI guidance talked about during some of the "call backs" after Q4 earnings. Perhaps the low NCI numbers have to do with something with Tesla selling off some of Solarcity's assets. But as retail investors, we didn't and don't have access to that kind of info... and this is unfair. (note: the NCI number in Q1 was so drastically lower than all previous quarters last year that I would imagine that Tesla would have had to give some "color" on NCI numbers in order for analysts to have any clue with making their forecasts. Thus, that's why I speculate it was either discussed during "call backs" with analysts, or discussed at a later time via another channel.)

The simple solution: Tesla ought to audio record all "call backs" with analysts and release those recordings for all to hear. Also, they ought to audio record any meetings with investors that they have and release those so that retail investors are given the same chance/opportunity as institutions.

 

[schonelucht]

I agree 100% with @DaveT. In fact I started this topic with an outright "The energy side is too much in flux and complicated to model for me". I could not be more right. We simply don't have enough information on the SolarCity part of the business. It is no secret I was 100% against the SolarCity takeover and everything I've seen since vindicates this. This is just one more nail in the coffin. Had Tesla still just been Automotive we would had done a very reasonable job on predicting the quarter. Now we are all left with egg on our face.

Related, anyone who continues to claim the buy wasn't a bailout is crazy. Look at the poor showing of Solar. And that's within the superior sales organisation that is Tesla. A standalone SolarCity would have been in bankruptcy for a while now.

The NCI's seems to behave like @brian45011 predicted. The majority seems to come from a very aggressive write down schedule on leased installations. As soon as your new (leased) deployments drop, so will the nci losses'.

 

[neroden]

I still think Solarcity will turn out to have been a valuable purchase in the long run for:
(1) the sweetheart deal on the Buffalo factory
(2) the large number of installers (who will be used installing the battery systems)
(3) the future cash flow of the existing leases, which can be sold to raise capital (I don't think this was a business with any significant real profits but I do think the existing leases were *undervalued* due to the incomprehensible accounting -- like I say this changes in 2018 or 2019 and maybe we get the real picture)

But it absolutely did need to be bailed out. Totally a "distressed company" reorganizaton situation.

 

[neroden]

The NCI's seems to behave like @brian45011 predicted. The majority seems to come from a very aggressive write down schedule on leased installations. As soon as your new (leased) deployments drop, so will the nci losses'.

And then five years later, the artificial accounting-induced losses will reverse and start showing profits.

What was SolarCity's peak volume installation quarter? We should be able to predict when the "losses" from the leases will reverse based on this: it'll be around 5 years from then.

Except all the accounting standards will be changed before then, I think...

 

[Ocelot]

Firstly thanks to everyone for adding Colour ( most overused word in the conference call) to this thread.

I have two things that somewhat weigh on my brain, and cause some dissonance relative to how I have placed my bet.
1) despite a lot of smart people's best efforts, the solar city accounting still seems opaque and guesswork. I really question at this point why? Their CFO also left in the midst of all this, despite being relatively new to Tesla. I do worry there might of been behind the scenes disagreements.
2) every quarter I expect tesla energy to start making massive gains. I expect in the long run the energy component might dwarf the car sales strictly do to massive volumes, and the dire need of a paradigm shift in Energy provision in order to at least try to avoid the sixth major extinction. It is going up nicely...63 per cent over last quarter, but how? Why? Guidance? Where is the colour?

 

[schonelucht]

And then five years later, the artificial accounting-induced losses will reverse and start showing profits.

NCI profits do us no good though. That's consolidated profit that is not attributable to shareholder equity. Ie, the money goes to the investors in the VIEs, not Tesla.

 

[schonelucht]

This thread discusses 2017Q1 results. To start the discussion of, here is my model for profit for the automotive side of TSLA.

So. How did I do?

On the revenue side for direct sales, $1 958M + $150M EAP = $2 108M. Reality was $2 000M + $35M = $2 035M

Reasons for going wrong : I underestimated the increase in average transaction price and a shift towards more direct sales but overestimated the EAP revenue recognition.

On the revenue side for leasing, $210M from new leases and $75M from expiring resale value guarantees. Total model $285M but in reality it was $254M (breakdown unknown at this point).

Reasons for going wrong : Missed a shift towards less leasing.

Note for the future : I could have known this quarter would have had less leasing since that is primarily an American affair while this quarter saw a huge surge in Chinese/HK deliveries.

On the cost side for direct sales, $1 546M in reality it was $1 496M

Reasons for going wrong : I was too skeptical on improving margins.

On the cost side for leasing I had $194M but in reality it was $166M.

Reasons for going wrong : Once more the shift towards direct sales.

On to expenses. I modeled a straight 10% increase. Excluding special charges the growth in reality was only 8%. But a full quarter of SolarCity OpEx likely tilted that way above 10%.

Final verdict : 5/10. I was way off (>$100M) on a number of headline numbers and missed at least one trend which we should have known about. But in the end my sum ended up on the same line as reality. I predicted a modest loss and we got a larger loss. Therefore barely a passing grade (although in my time, only a 6/10 was a passing grade) Good luck to all the contendors for Q2!

 

[luvb2b]

i don't think the nci's are the problem, those were low quality anyway. i don't think the lack of zev sales was the problem, those are one-timers too. i don't think the 67m extra in one time opex related to the acquisition is the problem.

the aggregate of those 3 "non-problems" is a report that looks like a real problem and re-opens the short narrative that could have been closed with a gaap profit.

there was an extra 70m in opex that is a bit higher than i expected, a little problem. the lack of any meaningful guide for tesla energy, a little problem. and a meaningful drop in solarcity deployment yoy, also a little problem.

basically it's a report with too many fleas and longs (including me) were probably out too far over their skis. today's move will flush weak longs, force margin selling, flush near term options, and draw in more shorts. that will lay the groundwork for any further move.

just on sales and manufacturing efficiency, this was an awesome report. great margins. fantastic gross profits. it's the opex which is murder but that's forgivable due to the 3 launch.

stock set a new 1 month low today, last time that happened it lasted 1 day, then the stock did a back and forth before ripping higher. i'd expect similar action now, thinking the stock will flop around here between 280-300 for a few weeks getting rid of all those who can't afford to stay in.

I think us retail investors are getting hurt because we don't have access to "call backs" that analysts have. They also have a line open with IR as well that we don't have. My guess is that probably (maybe?) there was NCI guidance talked about during some of the "call backs" after Q4 earnings. Perhaps the low NCI numbers have to do with something with Tesla selling off some of Solarcity's assets. But as retail investors, we didn't and don't have access to that kind of info... and this is unfair. (note: the NCI number in Q1 was so drastically lower than all previous quarters last year that I would imagine that Tesla would have had to give some "color" on NCI numbers in order for analysts to have any clue with making their forecasts. Thus, that's why I speculate it was either discussed during "call backs" with analysts, or discussed at a later time via another channel.)

The simple solution: Tesla ought to audio record all "call backs" with analysts and release those recordings for all to hear. Also, they ought to audio record any meetings with investors that they have and release those so that retail investors are given the same chance/opportunity as institutions.

 

[ValueAnalyst]

side-by-side my model vs. actual numbers. in the actual numbers i had to guess at some of the breakdowns which were not provided in the letter.

line item	q1 17 luv's est	q1 17 act.	q4 16 act.	q3 16 act.
ls veh % total
avg price
revenue
auto sales
auto leasing
1 time autopilot
zev credits
total auto
energy storage
solarcity
grohmann
services/other
total revenue
cost of revenue
auto
auto leasing
total auto
energy storage
solarcity
grohmann
services & other
total cost of rev
gross profit[/B]

[TD2] 0.25 [/TD2][TD2] 0.26 [/TD2][TD2] 0.25 [/TD2][TD2] 0.32 [/TD2] [TD2] 105.40 [/TD2][TD2] 107.27 [/TD2][TD2] 103.28 [/TD2][TD2] 105.40 [/TD2] [TD2]1,976,250[/TD2][TD2]1,985,425[/TD2][TD2]1,719,609[/TD2][TD2]1,778,901[/TD2] [TD2]239,274[/TD2][TD2]254,540[/TD2][TD2]254,674[/TD2][TD2]231,285[/TD2] [TD2]44,000[/TD2][TD2]49,635[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]126,800[/TD2][TD2]0[/TD2][TD2]19,840[/TD2][TD2]138,541[/TD2] [TD2] 2,386,324 [/TD2][TD2] 2,289,600 [/TD2][TD2] 1,994,123 [/TD2][TD2] 2,148,727 [/TD2] [TD2]70,928[/TD2][TD2]50,000[/TD2][TD2]47,285[/TD2][TD2]23,334[/TD2] [TD2]200,000[/TD2][TD2]163,944[/TD2][TD2]84,100[/TD2][TD2]0[/TD2] [TD2]17,000[/TD2][TD2]17,000[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]200,357[/TD2][TD2]175,726[/TD2][TD2]159,123[/TD2][TD2]126,375[/TD2] [TD2] 2,874,609 [/TD2][TD2] 2,696,270 [/TD2][TD2] 2,284,631 [/TD2][TD2] 2,298,436 [/TD2] [TD2]1,537,108[/TD2][TD2]1,496,649[/TD2][TD2]1,372,604[/TD2][TD2]1,355,102[/TD2] [TD2]157,535[/TD2][TD2]166,026[/TD2][TD2]171,818[/TD2][TD2]161,959[/TD2] [TD2] 1,694,643 [/TD2][TD2] 1,662,675 [/TD2][TD2] 1,544,422 [/TD2][TD2] 1,517,061 [/TD2] [TD2]74,474[/TD2][TD2]50,000[/TD2][TD2]60,779[/TD2][TD2]24,281[/TD2] [TD2]140,000[/TD2][TD2]101,773[/TD2][TD2]67,000[/TD2][TD2]0[/TD2] [TD2]16,150[/TD2][TD2]17,000[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]206,368[/TD2][TD2]196,876[/TD2][TD2]177,152[/TD2][TD2]120,359[/TD2] [TD2] 2,131,635 [/TD2][TD2] 2,028,324 [/TD2][TD2] 1,849,353 [/TD2][TD2] 1,661,701 [/TD2] [TD2]742,974[/TD2][TD2]667,946[/TD2][TD2]435,278[/TD2][TD2]636,735[/TD2] [TR][/TR]
[TR][TD]auto gaap gm[/TD][TD2]29.0%[/TD2][TD2]27.4%[/TD2][TD2]22.6%[/TD2][TD2]29.4%[/TD2][/TR]
[TR][TD]opex[/TD][/TR]
[TR][TD]tesla r&d[/TD][TD2]250,000[/TD2][TD2]292,040[/TD2][TD2]234,960[/TD2][TD2]214,302[/TD2][/TR]
[TR][TD]tesla sg&a[/TD][TD2]370,000[/TD2][TD2]458,455[/TD2][TD2]365,909[/TD2][TD2]336,811[/TD2][/TR]
[TR][TD]1time acq cost[/TD][TD2]0[/TD2][TD2]0[/TD2][TD2]15,807[/TD2][TD2]0[/TD2][/TR]
[TR][TD]solarcity r&d[/TD][TD2]30,000[/TD2][TD2]30,000[/TD2][TD2]11,000[/TD2][TD2]0[/TD2][/TR]
[TR][TD]solarcity sg&a[/TD][TD2]145,000[/TD2][TD2]145,000[/TD2][TD2]74,300[/TD2][TD2]0[/TD2][/TR]
[TR][TD]total opex[/TD][TD2]795,000[/TD2][TD2]925,495[/TD2][TD2]701,976[/TD2][TD2]551,113[/TD2][/TR]
[TR][/TR]
[TR][TD]op income[/TD][TD2]-52,026[/TD2][TD2]-257,549[/TD2][TD2]-266,698[/TD2][TD2]85,622[/TD2][/TR]
[TR][/TR]
[TR][TD]interest inc[/TD][TD2]3,000[/TD2][TD2]3,090[/TD2][TD2]2,179[/TD2][TD2]2,858[/TD2][/TR]
[TR][TD]interest exp[/TD][TD2]-50,000[/TD2][TD2]-50,000[/TD2][TD2]-43,104[/TD2][TD2]-46,713[/TD2][/TR]
[TR][TD]scty interest[/TD][TD2]-65,000[/TD2][TD2]-49,346[/TD2][TD2]-22,000[/TD2][TD2]0[/TD2][/TR]
[TR][TD]other income exp[/TD][TD2]0[/TD2][TD2]-18,098[/TD2][TD2]32,524[/TD2][TD2]-11,756[/TD2][/TR]
[TR][TD]1time scty gain[/TD][TD2]0[/TD2][TD2]0[/TD2][TD2]88,700[/TD2][TD2]0[/TD2][/TR]
[TR][TD]pretax income[/TD][TD2]-164,026[/TD2][TD2]-371,903[/TD2][TD2]-208,399[/TD2][TD2]30,011[/TD2][/TR]
[TR][TD]income tax[/TD][TD2]12,000[/TD2][TD2]25,278[/TD2][TD2]11,070[/TD2][TD2]8,133[/TD2][/TR]
[TR][TD]net income[/TD][TD2]-176,026[/TD2][TD2]-397,181[/TD2][TD2]-219,469[/TD2][TD2]21,878[/TD2][/TR]
[TR][TD]non-cont int.[/TD][TD2]-275,000[/TD2][TD2]-66,904[/TD2][TD2]-98,132[/TD2][TD2]0[/TD2][/TR]
[TR][TD]net inc to common[/TD][TD2]98,974[/TD2][TD2]-330,277[/TD2][TD2]-121,337[/TD2][TD2]21,878[/TD2][/TR]
[TR][/TR]
[TR][TD]basic shares[/TD][TD2]163,000[/TD2][TD2]162,129[/TD2][TD2]155,024[/TD2][TD2]148,991[/TD2][/TR]
[TR][TD]diluted shares[/TD][TD2]163,000[/TD2][TD2]162,129[/TD2][TD2]155,024[/TD2][TD2]156,935[/TD2][/TR]
[TR][/TR]
[TR][TD]diluted eps[/TD][TD2]0.61[/TD2][TD2]-2.04[/TD2][TD2]-0.78[/TD2][TD2]0.14[/TD2][/TR]

Why would you project Tesla sg&a flat q/q with upcoming model 3 ramp up? This will significantly rise over the coming quarters

 

[ValueAnalyst]

I think us retail investors are getting hurt because we don't have access to "call backs" that analysts have. They also have a line open with IR as well that we don't have. My guess is that probably (maybe?) there was NCI guidance talked about during some of the "call backs" after Q4 earnings. Perhaps the low NCI numbers have to do with something with Tesla selling off some of Solarcity's assets. But as retail investors, we didn't and don't have access to that kind of info... and this is unfair. (note: the NCI number in Q1 was so drastically lower than all previous quarters last year that I would imagine that Tesla would have had to give some "color" on NCI numbers in order for analysts to have any clue with making their forecasts. Thus, that's why I speculate it was either discussed during "call backs" with analysts, or discussed at a later time via another channel.)

The simple solution: Tesla ought to audio record all "call backs" with analysts and release those recordings for all to hear. Also, they ought to audio record any meetings with investors that they have and release those so that retail investors are given the same chance/opportunity as institutions.

NCI number is not as important as it seems, and it's usually an offset to another line item. In SCTY's, I believe it's partly an offset to their opex. Meaning, if deployments higher, opex higher, NCI higher, so it's pretty much a wash in the grand scheme of things. Basically, SCTY NCI number doesn't matter to Tesla shareholders. It matters to non-controlling interest. It will be very volatile going forward.

You're making way too much of these call-backs analysts get. I agree with Andrea that retail investors, especially with Tesla, have access to all the key data that allows solid investment decision for the longer term. The bigger issue with retail investors is lack of finance/accounting education and emotional ability to sit through price vol.

 

[ValueAnalyst]

i don't think the nci's are the problem, those were low quality anyway. i don't think the lack of zev sales was the problem, those are one-timers too. i don't think the 67m extra in one time opex related to the acquisition is the problem.

the aggregate of those 3 "non-problems" is a report that looks like a real problem and re-opens the short narrative that could have been closed with a gaap profit.

there was an extra 70m in opex that is a bit higher than i expected, a little problem. the lack of any meaningful guide for tesla energy, a little problem. and a meaningful drop in solarcity deployment yoy, also a little problem.

basically it's a report with too many fleas and longs (including me) were probably out too far over their skis. today's move will flush weak longs, force margin selling, flush near term options, and draw in more shorts. that will lay the groundwork for any further move.

just on sales and manufacturing efficiency, this was an awesome report. great margins. fantastic gross profits. it's the opex which is murder but that's forgivable due to the 3 launch.

stock set a new 1 month low today, last time that happened it lasted 1 day, then the stock did a back and forth before ripping higher. i'd expect similar action now, thinking the stock will flop around here between 280-300 for a few weeks getting rid of all those who can't afford to stay in.

The opex jump is related to model 3 ramp up and was expected.

There doesn't have to be a reason for short-term price volatility. Cognitive dissonance is part of investing.

I agree that this down move will be short-lived.