About that Tesla third-quarter 'profitability' | FT Alphaville
Cost of Sales QoQ increase seems rather large?
Cost of Sales QoQ increase seems rather large?
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Near-future quarterly financial projections
- Thread starter luvb2b
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Fact Checking
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About that Tesla third-quarter 'profitability' | FT Alphaville
Cost of Sales QoQ increase seems rather large?
The FT model for Q3 is largely bogus, see this comment I wrote about it.
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Ah sorry I missed it, saw at the top of reddit and assumed it was fresh :-/
Fact Checking
Well-Known Member
Yeah, short sellers are routinely targeting Reddit with disinformation, by submitting new articles with manipulative headlines shortly before market open or market close.
This particular FT article is from yesterday, but was submitted to /r/teslamotors ~15 minutes before the 4pm NASDAQ close today.
"Under Promise, and Over Deliver." They already "Over Delivered" on vehicles, but they never "Promised" a Q3 profit.
IMO, it's good to project low at this time; the reverse would be very damaging to Tesla's credibility. SP is a steady $250, despite sell off in general markets and even with profits uncertain - we know the trend is up. So I welcome these negative, conservative headlines at this time. If there is an upside, the shock will be that much better and analysts will look that much more off their game.
I say give them more rope, just not too much.
IMO, it's good to project low at this time; the reverse would be very damaging to Tesla's credibility. SP is a steady $250, despite sell off in general markets and even with profits uncertain - we know the trend is up. So I welcome these negative, conservative headlines at this time. If there is an upside, the shock will be that much better and analysts will look that much more off their game.
I say give them more rope, just not too much.
About that Tesla third-quarter 'profitability' | FT Alphaville
Cost of Sales QoQ increase seems rather large?
Setting up a miss on revenue, $7.5B seems way high. And a beat on Net Income.
Waiting4M3
Active Member
They can frame it however they want but Q3 cash flow and net income, combined with guidance thet Q4 will be better, will destroy the bankruptcy narrative.
jdirik
Member
Cash flow in the short term is the key IMO.
ValueAnalyst
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$250M+ QoQ jump in lease revenue
it's a motivated post... so much nonsense, it's crazy.
I know my only contribution seems be inventory numbers, but we’re seeing a spike of used inventory coming through, heading into 4 figures. I guess that’s only $50-75m of used inventory on the books but is that figured into the numbers somewhere? If nothing else it must affect free cash.
Fact Checking
Well-Known Member
So 2016 had a 2-year leasing program, and I suspect these are those cars coming back from lease.
Many of the cars will have been bought by their owners, and the returned ones generated cash flow (leasing payments) in the 50-60% ASP range.
When these return to Tesla there shouldn't be much cash flow effect: the cars were made 2-3 years ago and consumed about 60-70% of ASP cash back then.
In terms of cash margin these cars are 10-20% away from being break-even. (Unless I'm missing something important about lease accounting.)
I think these leased cars were on inventory for the duration of the lease, and them being returned might have caused a re-valuing of the car, with a potential lowering of the inventory value?
But in principle this should be relatively cash neutral and inventory neutral, and given how much cash these cars generated already Tesla doesn't have to hurry to sell them. In that sense @luvb2b's model doesn't really have to take them into account, IMHO.
couldn't find my employee model - i actually had one at some point. this article Tesla has grown to 45,000 employees despite laying off ~4,000 people earlier this year may mean some upside to opex. the count at the end of the year was 37,500. the article mentions there were 40k before the layoffs and then 9% got laid off. and now here we are at 45,000. that's a lot of employees.
Was wondering the same. It does look like more of these employees are line workers as opposed to research / support staff, who would go into R&D or SG&A. I'd think growth at giga and Fremont would be a little over half the increase from 36.5 to 45 (40k - 9%). That said, not everyone at giga or Fremont would be line workers allocated under COGS.
As an observation. If you calculate that they have a 350k\year output pace and that 450k employees average 80k$ all-together compensation then you get 10.3k$\vehicle for labor.
Now some fairly large fraction of that labor is accounted for in Op.Ex or has nothing to do with direct automotive production so what does this imply about the accuracy of the German breakdown of 10k$ labor per vehicle? Does that simply imply that most of the labor is in the supplier chain instead (e.g. ex-Tesla)?
Now some fairly large fraction of that labor is accounted for in Op.Ex or has nothing to do with direct automotive production so what does this imply about the accuracy of the German breakdown of 10k$ labor per vehicle? Does that simply imply that most of the labor is in the supplier chain instead (e.g. ex-Tesla)?
Fact Checking
Well-Known Member
Here's a pretty good analysis of the structure of Tesla's labor costs:
It has an extensive list of sources and clearly laid out methodology. Here's the estimated composition of labor, by type:
That's with a headcount of 37.5K.
So if those numbers are accurate, and if most new hires were related to 'making cars', then that's an opex increase of about ~$200m per quarter. If these new hires started in early Q3 and the 45k headcount was for end of Q3, and if the headcount increase was linear, this is an opex upside of ~$100m for Q3 and ~$200m for Q4.
Here's a pretty good analysis of the structure of Tesla's labor costs:
It has an extensive list of sources and clearly laid out methodology. Here's the estimated composition of labor, by type:
That's with a headcount of 37.5K.
So if those numbers are accurate, and if most new hires were related to 'making cars', then that's an opex increase of about ~$200m per quarter. If these new hires started in early Q3 and the 45k headcount was for end of Q3, and if the headcount increase was linear, this is an opex upside of ~$100m for Q3 and ~$200m for Q4.
474 mail room workers? Uhhhh
When I was volunteering at the local delivery center at the end of last month, it became clear to me that about half the people there were temp staff (not counting the volunteers). I wonder if they are counted in that 45k, when the snapshot was taken?
