Tesla losses grow as sales fall short…

Tesla ended its second quarter with a larger-than-expected loss, but said it remains on track to increase production in the second half of this year and introduce a new car in 2017.

Tesla’s second-quarter loss grew nearly 60 percent to $293 million as it delivered fewer vehicles than planned. The company produced 18,345 vehicles during the April-June period, a quarterly record, but it delivered only 14,402, which was short of its goal.

The loss, of $2.09 per share, compared to a loss of $1.45 per share in the same quarter a year ago. The 13-year-old company has only reported one profitable quarter, in 2013.

Revenue rose 33 percent to $1.27 billion.

Tesla said the average price of its new Model X SUV is more than 15 percent higher than the Model S sedan.
Tesla’s shares rose less than 1 percent to $227.50 in after-hours trading.

Tesla said Wednesday 5,150 vehicles were still in transit at the end of the quarter and would be delivered early in the third quarter.

The company said it was making 2,000 vehicles per week by the end of the second quarter, and believes it can crank that up to 2,200 vehicles by the end of the third quarter and 2,400 vehicles by the end of this year.

From the report:

In Q2, we delivered 14,402 new vehicles consisting of 9,764 Model S and
4,638 Model X, which was slightly higher than what we stated in our July announcement. Model S remains the market share leader in North America and Europe among all comparably priced four-door sedans, and Model X is quickly gaining ground against similarly priced SUVs in all regions.

An interesting highlight in the outlook, in which Tesla notes that it has reached its funding limit with a banking partner:

We anticipate that direct leasing will rise from 8% of deliveries in Q2 to about 15% of deliveries in Q3, as we have reached our funding limit with a banking partner. We anticipate adding new partners that will allow us to fund our planned growth in the future. We recognize revenue on directly leased deliveries as cash is received over the lease term of typically three years, on both a GAAP and non-GAAP basis.

Why is that a problem? Because as Tesla admitted, as part of its operating cash flow, it commingled receipts from deposits for the Model 3, which have been estimated to be around $300 million.

Our GAAP cash flow from operations during the quarter was $150 million, which included the receipt of Model 3 deposits. After adding $143 million of cash inflows from vehicle sales to our bank leasing partners, our cash flow from core operations was nearly $293 million.

If one nets out the $300 million in one time deposit receipts from the reported $150 million in cash from operations and subtacts $295 million in Capex, the result is another quarter in which TSLA burned nearly half a billion dollars.

Despite having $3.3 billion in cash as of June 30 (after the most recent $1.7 billion capital raise) we expect Musk to come asking for another $1-2 billion shortly. After all he has insane growth “projects” to fund.

Despite the disciplined pace of capital spending in the first half of this year, we still expect to invest about $2.25 billion in capital expenditures in 2016, in support of our accelerated production plan for Model 3.

Finally, expect cash burn to really pick up going forward because as the company warns, “total non-GAAP operating expenses should increase sequentially in Q3 and Q4, and we now expect full year 2016 total non-GAAP operating expenses to increase by about 30%. The increases come from engineering, design, and testing expenses related to Model 3 supplier contracts, and higher sales and service costs associated with expanding our geographic presence.”

Then again, since no fundamentals matter for the stock, which continues to be driven only and entirely on hype as it burns billions upon billions, we fully expect TSLA stock to surge in the afterhours on the latest algo attack and short squeeze. For now, however, the stock is unexpectedly calm.

 

Source:Associated Press, zero hedge

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s