Q2 2018 Earnings Results

[ValueAnalyst]

PALO ALTO, Calif., July 18, 2018 (GLOBE NEWSWIRE) -- Tesla will post its financial results for the second quarter of 2018 after market close on Wednesday, August 1, 2018. At that time, Tesla will issue a brief advisory containing a link to the Q2 2018 Update Letter, which will be available on Tesla’s Investor Relations website. Tesla will hold a live question and answer webcast that day at 2:30pm Pacific Time (5:30pm Eastern Time) to discuss the Company’s financial and business results and outlook.

What is your estimate for Tesla's financial results for the second quarter of 2018?

Please feel free to discuss how you reached your estimate in a comment below.

 

[winfield100]

sheer random psychic guess

 

[defc0n]

3 votes so far <= (2.50). Anyone care to explain how you believe it could be that “good” ?

 

[ValueAnalyst]

3 votes so far <= (2.50). Anyone care to explain how you believe it could be that “good” ?

Three letters.

 

[Ellec]

I think the quarter will be a big surprise, with the Model 3 deliveries adding to the Model S/X and Energy, I see under -1 or even positive.

 

[vigleik]

Just a quick note: VA is asking about the GAAP result, which is not the “headline number” and is typically much worse than the non-GAAP result. Q1 was ($4.19) GAAP, ($3.35) non-GAAP.

I voted ($4.00), because I think Q2 is going to be similar to Q1. Margin on the model 3 is still terrible, and there are some one time items. Also,Tesla will move any expenses they can to Q2, and not sell any ZEV credits, to try to set the stage for a profit in Q3.

I also think Tesla will straddle the divide in Q3, posting a small GAAP loss but a non-GAAP profit. But it will be good enough. Q4 will have a GAAP EPS of about $1. Someone should remind me how wrong I turned out to be in about 6 months. (Or two weeks.)

 

[omgwtfbyobbq]

I'm guessing any profit from increased 3 sales will be wiped out by further infrastructure spending, but I'm hopeful they managed to get SG&A down a smidge.

 

[generalenthu]

I'm guessing any profit from increased 3 sales will be wiped out by further infrastructure spending, but I'm hopeful they managed to get SG&A down a smidge.

Infrastructure spending it's not expensed immediately. It's depreciated.

 

[generalenthu]

Not sure which universe these people voting a positive net income come from. Sorry.

 

[winfield100]

Not sure which universe these people voting a positive net income come from. Sorry.

we are time travelers from the very near future, well, some of us

 

[omgwtfbyobbq]

Infrastructure spending it's not expensed immediately. It's depreciated.

Can the total cost of infrastructurei installation be depreciated, or just the materials?

 

[generalenthu]

Can the total cost of infrastructurei installation be depreciated, or just the materials?

Yes, typically all expeses right till commissioning are capitalized, and I've heard this can include equipment loan interest till it's operational.

Fair warning: not an accountant.

 

[ValueAnalyst]

Infrastructure spending it's not expensed immediately. It's depreciated.

I believe OP meant operating expenses (specifically, SG&A), which are expensed; rather than CapEx, which is capitalized/depreciated.

 

[Drax7]

ValueAnalyst, where can I see your spreadsheet, you’ve done lots of good work in that area.

 

[dhanson865]

I believe OP meant operating expenses (specifically, SG&A), which are expensed; rather than CapEx, which is capitalized/depreciated.

Umm, you made post #1 in this thread. That makes you the OP.

 

[ValueAnalyst]

ValueAnalyst, where can I see your spreadsheet, you’ve done lots of good work in that area.

Thanks! Here are my detailed projections by quarter by product: ValueAnalyst on Twitter

My model is less detailed than many for the immediate quarter and more forward looking - i.e. through 2025.

 

[ValueAnalyst]

Infrastructure spending it's not expensed immediately. It's depreciated.

How much in ZEV credits do you expect Tesla to recognize in Q2?

 

[ValueAnalyst]

Umm, you made post #1 in this thread. That makes you the OP.

Sorry! I meant @omgwtfbyobbq

 

[omgwtfbyobbq]

I believe OP meant operating expenses (specifically, SG&A), which are expensed; rather than CapEx, which is capitalized/depreciated.

Exactly! Here's something from Tesla's Q3 10K last year that states they recoreded $25.8 million in compensation for Grohmann under SG&A, and I'm not sure what parts of Grohmann's/Perbix's operations would go under infrastructure and what parts would go under SG&A. If enough goes under SG&A, that might drop substantially as Tesla gets the Model 3 lines sorted.

Grohmann Acquisition On January 3, 2017, we completed our acquisition of Grohmann Engineering GmbH (now Tesla Grohmann Automation GmbH or “Grohmann”), a company that specializes in the design, development and sale of automated manufacturing systems, for $109.5 million in cash. We acquired Grohmann to improve the speed and efficiency of our manufacturing processes. At the time of acquisition, we entered into an incentive compensation arrangement for up to a maximum of $25.8 million of payments contingent upon continued service with us for 36 months after the acquisition date. Such payments would have been accounted for as compensation expense in the periods earned. However, during the three months ended March 31, 2017, we terminated the incentive compensation arrangement and accelerated the payments thereunder. As a result, we recorded the entire $25.8 million as compensation expense during the three months ended March 31, 2017, which was included in selling, general and administrative expense in our consolidated statements of operations.

 

[ValueAnalyst]

Exactly! Here's something from Tesla's Q3 10K last year that states they recoreded $25.8 million in compensation for Grohmann under SG&A, and I'm not sure what parts of Grohmann's/Perbix's operations would go under infrastructure and what parts would go under SG&A. If enough goes under SG&A, that might drop substantially as Tesla gets the Model 3 lines sorted.

This is a good question, and I do not know the answer with certainty. What I suspect, however, is that Grohmann/Perbix headcount expenses are mostly in R&D. $25.8m was a one-time comp expense for Grohmann’s previous owner.