q1 2018 earnings estimates

[brian45011]

i also don't like changes in how financials are presented without a very good reason.

Haven't tried to reconcile all of it, but initially looks like you were very accurate, with the main difference between what you projected and what Tesla reported caused by the $50 million in ZEV credits. I was thinking Q3 would be the best quarter to use regulatory credits, especially after reporting $179 million in 4Q17; maybe the selling price for those has risen back closer to the $5,000 fine per insufficient
credit?

Was hoping for some clarification on the call about timing the 200,000th US delivery.

 

[luvb2b]

thank you and yes zev credits drive most of the differences near the bottom line.

Haven't tried to reconcile all of it, but initially looks like you were very accurate, with the main difference between what you projected and what Tesla reported caused by the $50 million in ZEV credits. I was thinking Q3 would be the best quarter to use regulatory credits, especially after reporting $179 million in 4Q17; maybe the selling price for those has risen back closer to the $5,000 fine per insufficient
credit?

Was hoping for some clarification on the call about timing the 200,000th US delivery.

 

[Esme Es Mejor]

Nearly 100% of my posts are being removed.

Mod: As Elon might say, we have the logs. --ggr.

Don’t think of them as being removed. Think of them as being recalled for being defective. You could avoid this by putting out a better product in the first place.

 

[Waiting4M3]

Haven't tried to reconcile all of it, but initially looks like you were very accurate, with the main difference between what you projected and what Tesla reported caused by the $50 million in ZEV credits. I was thinking Q3 would be the best quarter to use regulatory credits, especially after reporting $179 million in 4Q17; maybe the selling price for those has risen back closer to the $5,000 fine per insufficient
credit?

Was hoping for some clarification on the call about timing the 200,000th US delivery.

Yes the 200k question would've be nice.

 

[schonelucht]

thank you and yes zev credits drive most of the differences near the bottom line.

I agree but we shouldn't be blind for a bit of a lucky break. Changing lease accounting gave the Tesla numbers a big boost in profitability that you didn't model but then that was partially offset by worse interest and losses on services. Obviously not trying to throw shade, I have no difficulties recognizing I did objectively worse this quarter!

Overall I like the numbers. We knew they were going to be bad already but in a few key areas they are better than I anticipated. Notably very good cost control . To be honest, I didn't feel Depak doing as good a job as Jason on this at first but I need to reconsider my position. Liked the gross break even on the M3. I had anticipated a gross loss on low delivery numbers. I need to tweak my fixed cost portion a bit to reconcile but it will only make Q3 and Q4 better than what I have.

Also, this is the first time that I feel battery storage is actually contributing to the bottom line positively and in a meaningfull way. I am calculating revenues of around $600/kWh for storage and costs of around $520/kWh. Still ways off from 30% gross margin, but at least solid single digits. On the other hand Tesla is really struggling to make anything from the solar side now. I am fine with that. Except for the 1GWh of panels that Panasonic is going to deliver this year to Tesla, I can't see there being much value from them in regular panel installations.

On cash flow, I was surprised to see a drop in D&A. I expected this number to rise as Tesla continues to invest heavily. Beyond that I agree it's weird they changed their reporting.

 

[bhzmark]

Don’t think of them as being removed. Think of them as being recalled for being defective. You could avoid this by putting out a better product in the first place.

What was the offense? I thought his posts we're pretty unemotional. Wrong but unemotional, not personal, no adhominems and fun to watch the debate.

 

[mongo]

Also, this is the first time that I feel battery storage is actually contributing to the bottom line positively and in a meaningfull way. I am calculating revenues of around $600/kWh for storage and costs of around $520/kWh. Still ways off from 30% gross margin, but at least solid single digits.

First off, I have no reason to doubt those estimates.
Are those numbers taking into account Elon's Australia tweet

$250/kWh at the pack level for 100MWh+ systems. Tesla is moving to fixed and open pricing and terms for all products.

? (And we don't know if that it s purely the sub-modules inside the PowerPack or the PP itself) Still a lot of cost in the inverters, shipping, project management, and installation.

Australia likely cost extra due to expedited shipping (reference Elon's Q4 knowledge of plane rental rates).

 

[ShortSeller]

Don’t think of them as being removed. Think of them as being recalled for being defective. You could avoid this by putting out a better product in the first place.

Good one, Elon would consider me to be dry and boring.

 

[schonelucht]

First off, I have no reason to doubt those estimates.
Are those numbers taking into account Elon's Australia tweet ? (And we don't know if that it s purely the sub-modules inside the PowerPack or the PP itself) Still a lot of cost in the inverters, shipping, project management, and installation.

No, that's PR bullshit. I derive the numbers from disclosed revenue and installations in each quarterly filing.

 

[mongo]

No, that's PR bullshit. I derive the numbers from disclosed revenue and installations in each quarterly filing.

Youch, it didn't seem out of line to me that installed cost would be >2x material, esp when the materials didn't include the interconnection and AC conversion.

 

[schonelucht]

Don't get me wrong, I agree it seems reasonable there is at least as much costs in everything surrounding such an install than in the pure powerpacks themselves. That's exactly why it's PR bullshit. What matters to investors en customers alike are total costs and revenues.

 

[mongo]

Don't get me wrong, I agree it seems reasonable there is at least as much costs in everything surrounding such an install than in the pure powerpacks themselves. That's exactly why it's PR bullshit. What matters to investors en customers alike are total costs and revenues.

So it may be a valid number, but useless in terms of total cost? (sort of like a block of VINs being registered, but having a huge unassigned buffer?)
Sure, bottom line is the important thing company wise, I'm just nerdy on the lower level details (fixed (not right term, raw HW cost) vs variable costs, where can more profit be gained in the future).

 

[ShortSeller]

Well I’m really happy this morning, how about everyone else?

 

[ggr]

I'm happy. There was good news in that earnings report, and institutions with fiscal responsibility have to recognize that, and the opportunity that a hissy-fit reaction to the stock price represents. Market about to open as I type. I'm in for some bargain calls.

 

[Reality]

yes, this is weird right? is this a change in presentation standards?
they lead the letter with 2,7b cash so not like they are trying to fool people. but i also don't like changes in how financials are presented without a very good reason.

better explanation than I thought, i was wondering it too

FASB ASU No. 2016-18 "We will adopt the ASU on January 1, 2018, which will result in restricted cash being combined with unrestricted cash reconciling beginning and ending balances."


https://www.pwc.com/us/en/cfodirect/assets/pdf/in-depth/fasb-restricted-cash-eitf-consensus.pdf

 

[Reality]

nice job on the model @luvb2b

Margin surprised me as did energy revenue, also ZEV credits, seems like they are selling all of them every quarter now?

 

[bdy0627]

Well I’m really happy this morning, how about everyone else?

You should be about to cover your positions as we add to ours, given the stock movement today. If you have followed this stock at all closely over the last 5 years, then you know well what happens when the rubber band is pulled down firmly. It has never stayed down before. Of course, this time may be different, but I would not bet on it.

 

[luvb2b]

here's the end result. please understand many things i have as far as revenue splits are estimates. we don't necessarily have very good information to split out solarcity from storage, or model 3 from model s/x at this point. assumptions have to be made and it's a question of how comfortable one is with whatever they are. based on my assumptions, generally speaking tesla is tracking on my model

for variation vs. my estimate, i see the following highlights:
higher confidence highlights:
1. s/x auto revenue came slightly better than i expected due to zev credits. sale/lease mix went towards sales vs. leases more than i had, but some of it is because (a) i didn't properly shift revenue into sales for accounting change, (b) i estimated percentage of leased s/x vehicles much higher than the reported 11%, and (c) avg. sale price of s/x went up much more than i thought (105 vs. 99).
2. model 3 asp appears to be higher than i thought too (58 vs. 53).
3. s/x gross margin surprised to the upside, i didn't expect they could do 25% with such a small delivery number. they might go over 25% next quarter if deliveries increase is my thought.
4. model 3 margin surprised to the upside (-20% vs. -27%).
5. total gross profit and operating income i'm right there excluding 50m in zev credits.
6. services margin looks very poor. i don't know how the costs of extra service centers flow into that, but shorts will say there's more repair expense getting hidden in services. another quarter or two and we'll know.
7. opex rose slightly more than auto revenue, which i'm sure the shorts will love to see. hard for me to place so much value on that yet as both are minor variations of 2-3%. need to see that revenue jump up 25-30% and then see how it looks.

luv's fudgy guesswork highlights:
1. energy revenues were better than i thought due to higher deployments, but i think pricing was bit lower than
2. storage margins continue negative at -23% but the highest of the last 4 quarters. i can't even believe this product runs so far in the red but they say it should finally turn positive in the back half. positive! i thought this would be a 20% gross margin product!

for reference my initial model started the thread, and with member inputs the "final" model was posted on page 5 of this thread: q1 2018 earnings estimates and is also shown below in the 1st column. 2nd column is actual reported figures. may be some changes based on the 10q, but this is a good start.

…

ls veh % total

avg price s+x

avg price model 3

revenue

auto sales ex 3

auto sales mod 3

auto leasing

1 time autopilot

zev credits

total auto

energy storage

solarcity

grohmann

services/other

total revenue

cost of revenue

auto sales ex 3

auto sales mod 3

auto leasing

total auto

energy storage

solarcity

grohmann

services & other

total cost of rev

gross profit

auto gaap ex 3 gm

auto-zev ex 3 gm

model 3 gm

auto-zev incl 3 gm

storage gm

scty gm

grohmann gm

services gm

opex

tesla r&d

tesla sg&a

1time acq cost

solarcity r&d

solarcity sg&a

total opex

op income

interest inc

interest exp

scty interest

other income exp

1time scty gain

pretax income

income tax

net income

non-cont int.

net inc to common

basic shares

diluted shares

diluted gaap eps

gaap net income

- stock based comp

- one time scty

non-gaap net income

non-gaap diluted eps

[TD2] luv q1-18 [/TD2][TD2] Mar-18 [/TD2][TD2] Dec-17 [/TD2][TD2] Mar-17 [/TD2] [TD2] 0.15 [/TD2][TD2] 0.11 [/TD2][TD2] 0.23 [/TD2][TD2] 0.26 [/TD2] [TD2] 99.00 [/TD2][TD2] 104.92 [/TD2][TD2] 98.15 [/TD2][TD2] 108.06 [/TD2] [TD2] 53.00 [/TD2][TD2] 58.00 [/TD2][TD2] 53.00 [/TD2][TD2] 0.00 [/TD2] [TD2]1,834,470[/TD2][TD2]2,037,011[/TD2][TD2]2,148,241[/TD2][TD2]2,000,060[/TD2] [TD2]433,540[/TD2][TD2]474,556[/TD2][TD2]81,726[/TD2][TD2]0[/TD2] [TD2]349,755[/TD2][TD2]173,436[/TD2][TD2]293,086[/TD2][TD2]254,540[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]35,000[/TD2] [TD2]0[/TD2][TD2]50,314[/TD2][TD2]179,142[/TD2][TD2]0[/TD2] [TD2] 2,617,765 [/TD2][TD2] 2,735,317 [/TD2][TD2] 2,702,195 [/TD2][TD2] 2,289,600 [/TD2] [TD2]171,828[/TD2][TD2]185,022[/TD2][TD2]80,037[/TD2][TD2]5,244[/TD2] [TD2]218,000[/TD2][TD2]225,000[/TD2][TD2]218,000[/TD2][TD2]208,700[/TD2] [TD2]-3,000[/TD2][TD2]0[/TD2][TD2]-2,600[/TD2][TD2]22,400[/TD2] [TD2]300,000[/TD2][TD2]263,412[/TD2][TD2]290,617[/TD2][TD2]170,326[/TD2] [TD2] 3,304,593 [/TD2][TD2] 3,408,751 [/TD2][TD2] 3,288,249 [/TD2][TD2] 2,696,270 [/TD2] [TD2]1,413,528[/TD2][TD2]1,527,758[/TD2][TD2]1,740,075[/TD2][TD2]1,496,649[/TD2] [TD2]553,150[/TD2][TD2]563,639[/TD2][TD2]259,556[/TD2][TD2]0[/TD2] [TD2]224,641[/TD2][TD2]104,496[/TD2][TD2]191,541[/TD2][TD2]166,026[/TD2] [TD2] 2,191,319 [/TD2][TD2] 2,195,893 [/TD2][TD2] 2,191,172 [/TD2][TD2] 1,662,675 [/TD2] [TD2]189,010[/TD2][TD2]226,863[/TD2][TD2]137,835[/TD2][TD2]6,373[/TD2] [TD2]152,600[/TD2][TD2]148,500[/TD2][TD2]143,880[/TD2][TD2]145,400[/TD2] [TD2]11,000[/TD2][TD2]11,000[/TD2][TD2]11,000[/TD2][TD2]14,900[/TD2] [TD2]366,000[/TD2][TD2]369,969[/TD2][TD2]365,576[/TD2][TD2]198,976[/TD2] [TD2] 2,909,929 [/TD2][TD2] 2,952,225 [/TD2][TD2] 2,849,463 [/TD2][TD2] 2,028,324 [/TD2] [TD2] 394,663 [/TD2][TD2] 456,526 [/TD2][TD2] 438,786 [/TD2][TD2] 667,946 [/TD2] [TD2]25.0%[/TD2][TD2]26.2%[/TD2][TD2]20.9%[/TD2][TD2]27.4%[/TD2] [TD2]25.0%[/TD2][TD2]26.2%[/TD2][TD2]20.9%[/TD2][TD2]26.3%[/TD2] [TD2]-27.6%[/TD2][TD2]-18.8%[/TD2][TD2]-217.6%[/TD2][TD2]0.0%[/TD2] [TD2]16.3%[/TD2][TD2]18.2%[/TD2][TD2]13.2%[/TD2][TD2]26.3%[/TD2] [TD2]-10.0%[/TD2][TD2]-22.6%[/TD2][TD2]-72.2%[/TD2][TD2]-21.5%[/TD2] [TD2]30.0%[/TD2][TD2]34.0%[/TD2][TD2]34.0%[/TD2][TD2]30.3%[/TD2] [TD2]466.7%[/TD2][TD2]-100.0%[/TD2][TD2]523.1%[/TD2][TD2]33.5%[/TD2] [TD2]-22.0%[/TD2][TD2]-40.5%[/TD2][TD2]-25.8%[/TD2][TD2]-16.8%[/TD2] [TD2]320,000[/TD2][TD2]332,096[/TD2][TD2]319,637[/TD2][TD2]239,070[/TD2] [TD2]540,000[/TD2][TD2]546,404[/TD2][TD2]542,290[/TD2][TD2]446,637[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]67,000[/TD2] [TD2]35,000[/TD2][TD2]35,000[/TD2][TD2]35,000[/TD2][TD2]44,800[/TD2] [TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]127,988[/TD2] [TD2] 1,035,000 [/TD2][TD2] 1,053,500 [/TD2][TD2] 1,036,927 [/TD2][TD2] 925,495 [/TD2] [TD2] -640,337 [/TD2][TD2] -596,974 [/TD2][TD2] -598,141 [/TD2][TD2] -257,549 [/TD2] [TD2]6,000[/TD2][TD2]5,214[/TD2][TD2]6,280[/TD2][TD2]3,090[/TD2] [TD2]-100,000[/TD2][TD2]-102,546[/TD2][TD2]-99,363[/TD2][TD2]-46,146[/TD2] [TD2]-53,000[/TD2][TD2]-47,000[/TD2][TD2]-47,000[/TD2][TD2]-53,200[/TD2] [TD2]-12,000[/TD2][TD2]-37,716[/TD2][TD2]-41,677[/TD2][TD2]-18,098[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2] -799,337 [/TD2][TD2] -779,022 [/TD2][TD2] -779,901 [/TD2][TD2] -371,903 [/TD2] [TD2]20,000[/TD2][TD2]5,605[/TD2][TD2]-9,094[/TD2][TD2]25,278[/TD2] [TD2] -819,337 [/TD2][TD2] -784,627 [/TD2][TD2] -770,807 [/TD2][TD2] -397,181 [/TD2] [TD2]-50,000[/TD2][TD2]-75,076[/TD2][TD2]-95,457[/TD2][TD2]-66,904[/TD2] [TD2] -769,337 [/TD2][TD2] -709,551 [/TD2][TD2] -675,350 [/TD2][TD2] -330,277 [/TD2] [TD2]170,000[/TD2][TD2]169,146[/TD2][TD2]168,314[/TD2][TD2]162,129[/TD2] [TD2]170,000[/TD2][TD2]169,146[/TD2][TD2]168,314[/TD2][TD2]162,129[/TD2] [TD2] -4.53 [/TD2][TD2] -4.19 [/TD2][TD2] -4.01 [/TD2][TD2] -2.04 [/TD2] [TD2]-769,337[/TD2][TD2]-709,551[/TD2][TD2]-675,350[/TD2][TD2]-330,277[/TD2] [TD2]140,000[/TD2][TD2]141,639[/TD2][TD2]134,348[/TD2][TD2]103,717[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]27,950[/TD2][TD2]11,571[/TD2] [TD2]-629,337[/TD2][TD2]-567,912[/TD2][TD2]-513,052[/TD2][TD2]-214,989[/TD2] [TD2] -3.70 [/TD2][TD2] -3.36 [/TD2][TD2] -3.05 [/TD2][TD2] -1.33 [/TD2]

 

[Reality]

@luvb2b

what do you mean by this? ARe you saying because there will be so many M3's on the road that it will be impossible to hide?


"6. services margin looks very poor. i don't know how the costs of extra service centers flow into that, but shorts will say there's more repair expense getting hidden in services. another quarter or two and we'll know."



I agree the change in OPEX isnt significant, we wont know how much it scales until early 2019 at the earliest

 

[racer26]

nice job on the model @luvb2b

Margin surprised me as did energy revenue, also ZEV credits, seems like they are selling all of them every quarter now?

Not even close - Tesla has lots of credits in the bank and they are generating more and more every day. Every car delivered in CA generates four credits to sell, and the value of the credits are around $2000/ea