Ba,ba,ba,ba,baby, You just ain’t seen nothin’ Yet.
source: Seeking Alpha
Did Tesla Have A Disaster Quarter?
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
On November 5th, Tesla (TSLA) announced its earnings for the third quarter of 2013. The results were mostly in line with the company's earlier projections; however, some of these results were not as good as what investors were looking for, since a lot of investors were actually looking for Tesla to beat its own estimate by a large margin. Because Tesla is mostly about hype and very little about fundamentals at the moment, the results led to a sell-off in the after-hours. Let's take a look at Tesla's third quarter and see if the sell-off was justified.
This was another non-profitable quarter for Tesla (even though the company focuses mostly on non-GAAP measures and considers itself profitable). The company posted a loss of 32 cents per share on revenues of $430 million for the quarter. Keep in mind that this number excludes Tesla's unrealized revenues, such as the revenues attached to the company's leasing program. Tesla's gross profit in the quarter was 23.70% (21% excluding ZEV credits, up from 14% in the last quarter), which shows that the company is making progress in reaching its target gross margin of 25% excluding ZEV credits. Compared to the last quarter, Tesla's research and development spending increased from $52 million to $56 million, and the company's selling, general and administrative costs jumped from $60 million to $77 million. As a result, while Tesla's gross profit only rose by $2 million (from $100 million to $102 million) the company's operating costs rose by $21 million (from $112 million to $133 million).
During the quarter, Tesla was cash flow-positive despite increased capital expenditures. During the quarter, Tesla increased its cash position from $746 million to $795 million, after spending $76 million in capital expenditures. This indicates a free cash flow of $49 million and roughly half of this number came from financing activities. Currently Tesla is building a large number of chargers across the US and it is investing in increasing its production rate and it is impressive that it was able to remain cash flow positive for the quarter.
Here’s somethin’, here’s somethin’, you’re never gonna forget.
Ya know, ya know, ya know, you just ain’t seen na, na, nothin’ yet.