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Near-future quarterly financial projections

Discussion in 'TSLA Investor Discussions' started by luvb2b, May 23, 2018.

  1. ReflexFunds

    ReflexFunds Member

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    Further to this, the apparent reduced production rate the past few weeks should help to reduce inventory going into year end. Freemont and GF1 work shifts may have been reduced from 3 to 1 or 2, so Tesla should still have improved labour productivity despite flattish volumes.
     
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  2. Fact Checking

    Fact Checking Active Member

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    BTW, according to @Troy's tracker, per state Model 3 delivery times improved significantly in Q4: for example Florida is down to 12 days - used to be 20+ days.
     
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  3. Fact Checking

    Fact Checking Active Member

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    BTW., yesterday @Troy's Q4 Model 3 production estimate dropped from 53k to 51.0k units - which is significantly lower than the Q3 figure of 53.2k.
     
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  4. lklundin

    lklundin Active Member

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    With Tesla's focus on maximizing US sales before the federal tax credit cuts in half, I have to imagine that Model S/X exports have been curtailed to meet all of this quarter's US demand.

    So I would not place too much significance on the Model S/X export numbers, even if they meet or exceed Q3 in a country like Norway.
     
  5. mrdoubleb

    mrdoubleb Active Member

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    On the contrary. I agree US deliveries are the priority this quarter. But if S/X sales are at normal, or better than normal levels elsewhere at the same time, wouldn't that mean that we are going to have a stellar quarter? Of course we don't know how the China tariff drama may have impacted deliveries over there, so that's a bit of a dark horse.
     
  6. Zhelko Dimic

    Zhelko Dimic Careful bull

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    Letting people take more vacation will also reflect positively in the book, as unused vacation otherwise shows as liabilities. Of course, this is very minor to the top line, and even overall cost structure, but it will help on the edge
     
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  7. ReflexFunds

    ReflexFunds Member

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    #1407 ReflexFunds, Jan 2, 2019
    Last edited: Jan 2, 2019
    Q4 earnings model:

    Revenue:
    upload_2019-1-2_20-25-48.png

    Profit:
    upload_2019-1-2_20-26-55.png

    Cash Flow: (On Tesla's definitions this is $1,894m Operating Cash Flow and $1,169m Free Cash Flow.
    upload_2019-1-2_20-29-29.png
     
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  8. TSLA_Hopeful

    TSLA_Hopeful Member

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    These analysts are idiots... how is this possibly a bad quarter? What kind of models are these idiots guiding to? And talk about not seeing the forest from the trees... you got international deliveries, leasing, RHD, autonomy, and China. It’s moments like this where you look back on the stock five years from now and wonder if humans are so short sighted... then realize that as a species we are. Classic example of the market under valuing Tesla...
     
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  9. Robertj

    Robertj Member

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    Reflex , many thanks for your informative calculations

    I would have thought that the reduction in vehicles in transit from 12,000 to approx 3,000 would have been positive for cashflow about $350m , is see you have that at 230 m ?
     
  10. Cherry Wine

    Cherry Wine Member

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    Still trying to wrap my head around EPS -- would these values equate to an approximate non-diluted EPS of 3.50?
     
  11. Buckminster

    Buckminster Member

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    Yup, thats why the TSLA shorts are now driving down the AAPL SP. It would be a bad look if TSLA looked cheap compared to AAPL..
     
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  12. oneday

    oneday Member

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    #1412 oneday, Jan 2, 2019
    Last edited: Jan 2, 2019
    Interested in seeing your update now that we have Q4 production and deliveries.
    Q4 deliveries:
    Model 3: 63,150
    Model S: 13,500
    Model X: 14,050

    Looks like you need to raise Model 3 deliveries by 1,150 and lower model s&x by 450 units.
     
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  13. mrdoubleb

    mrdoubleb Active Member

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    I have long given up on the Bloomberg tracker as I think it is way off and then justifies itself by self-correcting once real data is in and am a bit cautious with the monthly InsideEVs numbers as well for the same reason. No offense to @Troy, but it seems many of us were right with the "gut feeling" that his numbers are way too low based on anecdotal evidence or lack thereof (no sign of obvious production issues). So I wonder what he will find when looking into the miss on his formula and if he can compensate for future quarters. Was it the extremely high level of walk-in sales? I seem to recall him stating that about 86% of his respondents are reservation holders. And without his usual 98% accuracy, I wonder what if any tool we`ll have left to predict production/deliveries, other then guessing.

    Silver lining: starting February we will be able to track European deliveries for the 3 just like for the S/X with a very high level of accuracy based on official government registration databases (credits to @Troy and @hobbes for leading that work) every month. That should give us some idea together with the InsideEVs numbers - whatever those are worth.
     
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  14. neroden

    neroden Model S Owner and Frustrated Tesla Fan

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    Well, all I can say is that Tesla will be paying off some debt (likely more than the convertibles) and still end up ahead on cash by enough to cover the March debt.
     
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  15. Buckminster

    Buckminster Member

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    Agreed. Luvb2b update would be great.

    Remster32 figures from First Call:
    These are non-GAAP. GAAP EPS consensus is 1.09 ...

    EPS (non-GAAP) Estimates:
    BofAML 2.49
    Canaccord 4.34
    Citi 1.59
    Deutsche 2.05
    Elazar Advisors 2.60
    Goldman Sachs 1.14
    JPM 0.77
    Macquiarie 2.09
    Morgan Stanley 2.13
    Needham 3.22
    Oppenheimer 2.85
    Piper 2.61
    RBC 2.45
    Roth 1.79
    UBS 1.60
    Undisclosed 2.18
    Undisclosed 2.29
    Undisclosed 2.08
    Undisclosed 2.42
    Undisclosed 3.02
    Wedbush 1.98
    Wolfe Research 2.57

    Excluded from consensus
    Evercore 0.98
    JMP 1.60

    For TSLA Q4 from First Call:
    Revenue: 7,082.2
    EPS: 2.25
    Free Cash Flow: 405.6

    [​IMG]
     
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  16. Fact Checking

    Fact Checking Active Member

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    So I was looking over your model's cash flow sheet, and noticed that your Q4 estimate for changes to Payable (+$103m) and Receivables (+$100m) seem pretty low.

    To recap, let's see Tesla's full 2017 track record for reported "Accounts payable and accrued liabilities":
    • Q1: $2,531
    • Q1+Q2: $13,234
    • Q1+Q2+Q3: $170,326
    • Q1+Q2+Q3+Q4: $388,206
    I.e. the per quarter payables outflow in 2017 was:
    • Q1: +$2,531
    • Q2: +$10,703
    • Q3: +$157,092
    • Q4: +$217,880
    I.e. at the end of 2017 there was already a significant expansion in payables - probably related to the Model 3 ramp-up that was ramping up to a ~1k/week rate, but probably also seasonal from making lots of cars in Q4 but not paying it yet. (There's a ~60 days delay in paying suppliers.)

    Let's see the 2018 track record, as reported for the first three quarters:
    • Q1: $317,983
    • Q1+Q2: $909,720
    • Q1+Q2+Q3: $1,627,997
    ... which maps to:
    • Q1: +$317,983
    • Q2: +$591,737
    • Q3: +$718,277
    That +$718m Q3 growth is what I believe is listed under 'Payables' in your model's cash flow sheet.

    I believe assuming only +$103m for Q4 is overly pessimistic. Even if we go just by the 2017 track record we'd expect payables growth of +$217m.

    It is true that on Q4'18 Model 3 inventory levels got reduced by 1,756 units while in Q4'17 Model 3 inventory grew by about 875 units - I think the payables line is mostly a function of the production pipeline - and that went up in Q4.

    I.e. I think an approximate proxy of payables is roughly 66% of the quarter's production, which went up by at least 15%.

    In fact there's another possibility as well: the new Panasonic cell production lines at the GF1 apparently went online in mid-November, which increased pack production from ~4.5k/week to ~6k/week. This means that if we use 60 days as the payables delay then about 72% of the Model 3's were made in the last 60 days of the quarter at an effective rate of 5.6k/week production.

    So the actual Model 3 production expansion that matters to payables would be 4.5k => 5.6k, or +25%. If we roughly estimate about half of the payables being related to the Model S/X, the other half to Model 3, then I'd expect around 50% of the Q3 payables growth to happen in Q4 as well - i.e. in the $200m-$400m range.

    Another factor is that Model S/X production went down by about 1,742 units in Q4, while in Q4'17 final quarter S+X production went down by2,936 units (probably because S+X workers were temporarily working on the Model 3 lines). Yet Q4'17 payables expanded by +$217m, despite the headwind from significantly lower S+X production.

    Any payables expansion would directly and permanently improve cash flow an cash equivalents.
     
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  17. nasatech

    nasatech Vendor

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    Don't know if it is of any interest, but I made this website to track the Tesla Inventory: Tesla Inventory Stats

    You can see numbers of vehicles available (by day), vehicles added (by week) and what Model is most popular in the inventory.
     
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  18. Fact Checking

    Fact Checking Active Member

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    #1418 Fact Checking, Jan 13, 2019 at 1:53 AM
    Last edited: Jan 13, 2019 at 2:07 AM
    Regarding Q4 receivables flow of +$100m estimated by @ReflexFunds, I think that estimate is about half a billion dollars too low.

    Historic background - Q3'18 showed a huge jump in Accounts receivable flows:
    • Q1: $169,142
    • Q1+Q2: $98,509
    • Q1+Q2+Q3: $686,103
    On a quarterly basis:
    • Q1: +$169,142
    • Q2: -$70,633
    • Q3: +587,594
    The Q3 figure is what I believe is listed as -$588m as Q3 "Receivables" in @ReflexFunds's cash flow statement.

    For the whole of 2017 accounts receivable flow was +$24,635 - i.e. mostly netted out over the year - despite Q4'17 ending on Sunday with banks closed to recognize cash flows from the final ~2.5 days of Q4'17 deliveries.

    I believe in 2018 we are going to see a similar netting out of accounts receivable: the Q3 jump was an artifact of Q3 ending on a weekend as well: 2.5 days of end of quarter cash flow were "missing" due to bank clearing delays.

    So unless I'm missing something, since the Q1+Q2+Q3 sum for 2018 is +$686m, I think in Q4 we should expect accounts receivable flows mostly counteracting that growth, i.e. it should be in the -$500m-$700m range. This 'netting' of receivables should be helped by the fact that Q4'18 ended on a Monday.

    This would directly improve cash flow metrics compared to Q3 - including free cash flow.

    If we add in a possible payables expansion as well, the cash flow effect could be in the $500m-$1,000m range (!).

    That could be a source for a significant upside surprise for cash flow figures in the ER - and cash P/E ratios and FY'19 estimates would further improve as well, even under a pessimistic no-growth scenario (!).

    Disclaimer: this conclusion might be wrong if I made mistakes in my calculations, or if I misunderstood the reported numbers and the accounting treatment of them. Not advice.
     
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  19. ReflexFunds

    ReflexFunds Member

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    You are right that my payables and particularly my receivables estimates are conservative.

    Payables
    My payables is based on an estimate of c.$30k current raw material & supplier costs per model 3 produced. This means payables should increase by QoQ growth in model 3 volume * $30k * 60 days / 90 days. This comes closer to $140m in Q4 but i reduced to $100m to be slightly conservative. As you say, it is possible that the production rate in the last 60 days of Q3 was higher than the first 30, but I think this was also likely the case in Q2.


    Receivables
    I think main drivers for receivables increase in 9M18 are Q3 end weekend timing impact, higher underlying bank receivables on higher model 3 sales, increased use of S/X leasing partners over in-house leasing (also including accounting definition change), increased regulatory credit sales on higher US volume and growth in the energy business.

    I agree, its hard to understand such a high $588m receivables outflow in Q3, and it makes sense that the bulk of this is due to Q end timing, particularly with no leasing partners for model 3 currently. My $100m Q4 receivables inflow is based on collection of $150m delayed payments from Q3, and -$50m underlying outflow on growth of the business. Q4 numbers could well come in $300-400m higher, but I think it odd Tesla didn’t make the magnitude of the timing impact clearer at Q3 if this is the case.
     
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  20. Fact Checking

    Fact Checking Active Member

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    #1420 Fact Checking, Jan 13, 2019 at 5:16 AM
    Last edited: Jan 13, 2019 at 5:21 AM
    Yeah, but note that:
    • In Q2 Tesla had low production levels during much of the quarter, and then performed weeks of 5k production which resulted in ~11k Model 3's in transit. So their payables at the end of Q2 should scale roughly to 15-20k units.
    • End of Q3 they were at 4.5k/week already, so 8 weeks of that is ~36k units.
    • End of Q4 if they were at 6k/week for 6 weeks and 4k/week for 2 weeks, so there's roughly 44k units in the pipeline - a growth of about 8k units or $240m with your $30k/unit payables estimate.
    But there's no fault in being conservative - and your estimates are already higher than all honest Wall Street estimates, so it's not like you have any big incentives to increase the optimism of your numbers.

    I think Deepak Ahuja very clearly mentioned it during the conference call:

    Deepak Ahuja

    "Yeah, we reduced our inventory in Q3, which helped. And then, although we had higher payables because - sorry, higher receivables, because the quarter end, the weekend, we won't have that in Q4, so all of this should continue to help us in Q4 and beyond, the working capital again."​

    Maybe most people were listening to the call and the fact that he misspoke obscured the relevance of that sentence?

    He's very clearly linking higher receivables to the quarter end, with no qualification/adjective whatsoever.

    Edit:

    I also found this reference in the Q3 update letter:

    "Cash flow from operating activities in Q3 was $1.39 billion.
    This was mainly due to significantly improved volumes and profitability
    of Model 3. Change in key working capital items (receivables, payables and inventory) during Q3 impacted operating cash flow only slightly. Although our accounts payable increased as expected, our accounts receivables also increased by a similar
    magnitude since the quarter ended on a Sunday, which limited our ability to collect cash from the banks financing our customer loans
    "​

    Here too they are putting it into writing that the primary reason for the receivables increase was due to the end of quarter bank settlement delay artifact.

    Also, Q3 was a fantastic blow-out quarter already - Tesla had no reason to correct any apparent misconceptions about items that would help Q4 results.
     
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