The likely drop of s/x units could explain why Elon wrote tiny profit in 1q19. It's otherwise a puzzling statement, knowing that EU and China will boost sales of the premium M3. It takes more than three M3s to make up the loss of one s/x, given that s/x is twice the price of M3 and 1.5x of the gross margin.
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Near-future quarterly financial projections
- Thread starter luvb2b
- Start date
Singer3000
Member
Yes I think you are right. The VIN breakdown so far this month is totally inconsistent with a qoq worsening of margins / volumes for the Three.
Will be fascinating to see what the guidance is for S&X on the call and what the plan is. I'll give the benefit of the doubt for now and say this production cut was something longer in the planning and not just a knee jerk reaction to weak sales following the US tax credit cut. The announcement was made on 10th Jan, would be drastic action indeed if it was made on just a week or so's sales data.
Be sure to compare the same trim levels.
S/X 75 and 100 combined for 30% GM average, but 100 pulled in more profit (comparing price delta to cost of 25kWh of cells).
3s range from MR to AWD P (and soon SR).
Likely, a 3P was more profitable than a 75X (and possibly S).
As of 1/25/19
Fact Set
Estimize
Fact Set
- Revenue $7.13 billion
- GAAP EPS $1.23
- Non-GAAP EPS $2.19
Estimize
- Non-GAAP EPS $2.07
- Revenue $7.06 billion
- Revenue $7.04 billion
- GAAP EPS $1.69
- Non-GAAP EPS $2.82
- Revenue $7.04 billion
- Net Income $163 million
- GAAP EPS ????
- Non-GAAP EPS ?????
It is my belief too - that it is more profitable for Tesla to sell a Model 3 LR Performance than a 75S or 75X. If we accept that a Model S/X battery costs $180/kWh (using imported battery cells and less automated assembly) and the Model 3 battery costs $130/kWh, then Tesla is making a $3750 savings.
Hogfighter
Professional Lurker
True....not to mention that aluminum in the S is more expensive than the steel in the 3, automated lines on the 3, etc.
@ReflexFunds With your net income divided by 171.3 million shares outstanding I get an EPS of $0.95 is that correct?
What may be more important for determining TSLA action immediately post-earnings is comparing Q3 FactSet estimates to Q3 actuals, and then contrasting those with FactSet Q4 estimates with our @luvb2b / @ReflexFunds models. I think the surprise factor is not going to be nearly as big.
According to this article published the day before earnings, Tesla Reports Earnings on Wednesday: 7 Important Things to Watch FactSet had a consensus estimate of:
- Revenue $6.05 billion
- GAAP EPS ($0.95)
- Non-GAAP EPS ($0.03)
Indeed, it looks like a small revenue "miss" relative to FactSet expectations is possible.
With that said, Tesla has never posted two profitable quarters in a row. That they now appear set to do just that should be a positive catalyst for the stock, though I expect it will be glossed over by the purveyors of FUD, who will choose to focus on any negative (or plausibly negative) aspect of the report / call that they can.
Will be interesting to see what happens, if nothing else.
EVNow
Well-Known Member
Yahoo shows a consensus of 2.22 EPS (non-GAAP I guess). Not sure where they get that.
Fact Checking
Well-Known Member
The Model 3 also has much simpler interior, which reduces the per unit labor cost.
You are projecting 10500 Model S and 11000 Model X sales in Q1 2019, isn’t it high regarding the termination of 75? You’re projecting S+X sales combined the same as Q1 2018 despite the fact, that 75 is gone?
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I had been assuming we would get new battery options in Feb. This is now looking less likely, but I will wait for Q1 guidance before updating my model. If we are left just with 100D sales then volume will be down significantly, but ASP and gross margin will both be up significantly. Take rate for Model 3 AWD P is also likely to increase significantly relative to my current model.
I'd wager on new battery options in Feb. I'm in full agreement that dropping the 75D is a net negative to profitability (that is not overcome by shifting demand to other products or even diverting resources to production of the 3) and they have some objective in mind that's temporary.
I certainly can imagine demand dropping below 100k this year, but even in that scenario they wouldn't drop the lineup diversity especially since there's not much cost involved in bolting on a different battery pack.
This could be one of the stranger and harder to predict earnings reports. My head is all over the map on what Q1 and Q2 look like.
I certainly can imagine demand dropping below 100k this year, but even in that scenario they wouldn't drop the lineup diversity especially since there's not much cost involved in bolting on a different battery pack.
This could be one of the stranger and harder to predict earnings reports. My head is all over the map on what Q1 and Q2 look like.
Fact Checking
Well-Known Member
I believe @ReflexFund's $163m net GAAP income corresponds to approximately $0.90 diluted GAAP EPS.
This is Reuters (First Call?):
${Instrument_CompanyName} ${Instrument_Ric} Analysts | Reuters.com
Revenue: $7,064m (has increased slightly from a week ago - being gamed I think.)
Non-GAAP EPS: $1.64 (has increased slightly)
(My estimation of GAAP EPS from that: $0.51)
Revenue: $7,064m (has increased slightly from a week ago - being gamed I think.)
Non-GAAP EPS: $1.64 (has increased slightly)
(My estimation of GAAP EPS from that: $0.51)
(Note that the Reuters website is confusing: the quarters are shifted by one due to Tesla not having reported Q4 yet but being in Q1'19 already. So what they list as Q4 is in reality Q3, and the Q4 estimates are marked as Q1'19, etc.)
So Q4's FUD game-plan is most likely going to be to paint Q4 ER as a "revenue miss", "slowing growth", or if revenue actually declined over Q3's $6.8b then as the usual "Tesla in crisis" narrative. Second profitable quarter in a row will be downplayed and nullified with quotes from Elon that predict Q1'19 as "tiny".
To us here the most interesting bit is going to be cash flow: is it going to be as healthy as in Q3, worse a bit, or better? Future capex will depend on the cash flow Tesla can sustain, as I'm pretty sure Elon doesn't want any equity financing if he can avoid it.
I can imagine pretty much any stock price movement from here on.
