Tesla reports a worse than expected loss $282.3m

[HTSS_TR]

Originally Posted By: Nebroch
...equipment, tool, which is supposed to come from Japan to make those cells. Panasonic has promised "up to" 1.6 billion usd for the project, and not a single kWh will be produced without this japanese company.

Tesla's PR magic in incredible. When they are one of the largest buyers of these batteries, they make it look like they are the producer.


Tesla and Panasonic are owners of this Gigafactory, Panasonic will invest up to 30-40% of total cost in this factory. Panasonic isn't the sole owner of this factory, and Panasonic will not be the one who run the factory.

Yes, Tesla was the big Lithium-ion battery customer of Panasonic but they will make the battery it needs(with cooperation of Panasonic) in near future.

If the Gigafactory in Nevada doesn't produce li-ion batteries, then what it does there ?

Quote:
While the total investment to be made by Panasonic is not yet known, Tesla CEO Elon Musk had said earlier that he expects its primary partner to invest 30–40% of the costs needed for the factory.

Over 7,000 lithium-ion battery cells are used in each Model S battery. While Panasonic currently supplies these batteries to Tesla, the quantity falls below Tesla’s requirement. Thus, Tesla is building the Gigafactory to manufacture the batteries, along with a few partners.


http://finance.yahoo.com/news/panasonic-reveals-plans-teslas-gigafactory-112755450.html

This $5B factory will manufacture battery cells and packs to use in cars and home. Tesla did secure lithium from some suppliers to make lithium-ion battery cells in this factory.

Quote:
Tesla Motors Inc (is building a battery factory, called GigaFactory, in Nevada. The $5 billion investment is aimed at reducing battery costs by roughly 30 percent, “partly by bringing in in-house materials suppliers,” a Wall Street Journal article explained.

Early on Friday, the source informed that the automaker has secured long-term supplier agreements with North American companies Bacanora Minerals Ltd, which manufacture lithium, the main raw material used in batteries.

"Main Strategic Differentiator": The analyst assured that GigaFactory is the main strategic differentiator for the company, and this announcement indicates that in the first half of 2016, the facility may start with some limited production of batteries.


http://finance.yahoo.com/news/tesla-secures-lithium-suppliers-gigafactory-175144011.html

 

[HTSS_TR]

Originally Posted By: Nate1979
I will post it again. Tesla reported a much worse than expected GAAP loss (yes, investors give expected numbers for both GAAP and non GAAP).

Quote from the link I posted:
"Tesla reported a GAAP loss of $282.3 million, or $2.13 per share, compared to a loss of $154.2 million, or $1.22 per share, in the same quarter last year. Analysts polled by Thomson Reuters ahead of the earnings release had expected a GAAP loss of $77.7 million or 86 cents per share, so the company had a huge miss there."

Not sure why you want to argue about it. Tesla lost money and depending on whether you use generally accepted accounting practices or not they either did much worse than expected or as bad as expected.


Quote from the link you posted:
Quote:
But Tesla’s first quarter adjusted (non-GAAP) loss was $75.3 million, or 57 cents per share, wider than the $45.3 million, or, 36 cents per share in the first quarter last year. The Wall Street consensus was for a loss of $83.7 million, or 58 cents per share. (Adjusted losses remove stock-based compensation, interest on borrowing and the way the company accounts for leased cars.) The earnings beat, as it’s called, is what sent the stock price upward after the bell.


Please note this importance "The earnings beat, as it’s called, is what sent the stock price upward after the bell"

What is the meaning of "The earnings beat" and "Wall Street consensus" in the article you linked, and why did the stock went up in after hour trading if the finance report is "worse than expected loss" as you had in the title ?

I don't try to spin anything, they are written in the article you used, and the article I linked clearly stated that Tesla last quarter report was better than expected by Wall Street.

I didn't try to say that Tesla report any profit, I expected they lost money for many more quarters and probably many more years. They are expanding manufacturing capability so they need to invest a lot of money every month, quarter and year.

You need to understand the simple term "expected" in your tittle. In the financial report the term "expected" is not the same as normal people use.

 

[Nate1979]

Tesla reported worse than expected GAAP earnings loss and better than expected Non-GAAP earnings loss. All of these expectations were Wallstreet expectations (GAAP and non-GAAP).

Happy now? Not sure why you keep only mentioning half of the story (i.e. the non-GAAP) numbers.

As the article mentioned Tesla did not meet Wallstreet expectations for GAAP loss numbers.

 

[Nate1979]

The reason I keep pointing out the GAAP numbers is that Tesla is under a lot of pressure from regulators for how they are reporting their NON-GAAP numbers (they report both). Non-GAAP reporting they play with the numbers a little bit and is one reason they look better than they really are according to accepted accounting practices.

To me the non-GAAP numbers are irrelevant.

 

[HTSS_TR]

Originally Posted By: Nate1979
The reason I keep pointing out the GAAP numbers is that Tesla is under a lot of pressure from regulators for how they are reporting their NON-GAAP numbers (they report both). Non-GAAP reporting they play with the numbers a little bit and is one reason they look better than they really are according to accepted accounting practices.

To me the non-GAAP numbers are irrelevant.

Nate, please tell me why the article you linked say this "The earnings beat, as it’s called, is what sent the stock price upward after the bell". Also "But Tesla’s first quarter adjusted (non-GAAP) loss was $75.3 million, or 57 cents per share, wider than the $45.3 million, or, 36 cents per share in the first quarter last year. The Wall Street consensus was for a loss of $83.7 million, or 58 cents per share."

To me "Wall Street consensus" is the same as "Wall Street expected".

Also, why did the stock went up after trading hour when report came out ? If the financial report was worse than "Wall Street expected" then the stock should go down not up.

Watch this video at 7'20", they didn't say anything about GAAP or non-GAAP, they simply said "expected" and stock shoot up 7% and it lost 4% intra-day. As far as I know "Wall Street expected" or "Wall Street consensus" is using non-GAAP numbers.

http://finance.yahoo.com/news/tesla-earnings-on-the-way-191512044.html
---------------------------------

Quote:
GAAP is short for generally accepted accounting principles. GAAP accounting standards offer uniformity in how companies report their financial performance. However, income statements reported based on GAAP don't always reflect the ongoing performance of a companies underlying operations. For example, a company may write-down an asset or restructure its organization. These actions usually come with large one-time costs that distort company profits. As such, a company will also provide an "adjusted" earnings number that excludes these nonrecurring items.


Quote:
"We believe that the best EPS measure for valuation purposes sits somewhere between pro forma and GAAP EPS, where in between varies by company, industry and sector," wrote Deutsche Bank's David Bianco in December 12 note to clients. "Although pro forma EPS can overstate true EPS, GAAP EPS can understate true EPS."

Regarding write-downs, he points out that there is a downward bias to earnings due to GAAP accounting standards


http://www.businessinsider.com/gaap-vs-non-gaap-earnings-eps-2013-12

 

[edyvw]

I cannot believe that they posted loss since apparently they building better cars then BMW

 

[Y_K]

non-GAAP reporting is also known as Enron reporting. It's fraud, no matter how you slice it.

 

[HTSS_TR]

Originally Posted By: edyvw
I cannot believe that they posted loss since apparently they building better cars then BMW

I bet you $25 that Tesla Model 3 test with BMW 320i(similar MSRP) by a reputable magazine such as Car&Driver or Road&Track or Motor Trend, that Tesla comes out as a winner.

Comparing Model 3 to BMW i3 is unfair, Model 3 will be so much better such that it is almost the same as comparing Fiat 500 with M3.

 

[Nate1979]

Originally Posted By: Y_K
non-GAAP reporting is also known as Enron reporting. It's fraud, no matter how you slice it.


I don't think this is true for Tesla. While non GAAP reporting can be reported in any way the company sees fit and can change from quarter to quarter I don't think you can conclude that Tesla is fraudulently reporting their non GAAP EPS. The gap is growing between the two numbers but analysts understand the difference (tons of article for Tesla on this matter).

Non GAAP shows a rosier picture and as the gap widens they will face additional pressure to report numbers that are not as different.

 

[HTSS_TR]

Originally Posted By: Y_K
non-GAAP reporting is also known as Enron reporting. It's fraud, no matter how you slice it.

Why every financial analyst is using non-GAAP ?

Did you watch the video at 7'20" in this report ? They didn't even mention that the expected lost was non GAAP.

http://finance.yahoo.com/news/tesla-earnings-on-the-way-191512044.html

Enron's fraud has nothing to do with non-GAAP format, it was just a simple fraud, they just made up some numbers.

 

[Nate1979]

Analysts generally don't give GAAP EPS expecataions for Tesla but some do. But investors watch both numbers very closely - Tesla of course reports both.

 

[DoubleWasp]

1. Elon Musk promises profitability for Tesla for the umpteenth time.

2. Tesla fails for the umpteenth time.

3. Elon insists that failing to achieve profitability is all just a part of his genius plan for the umpteenth time. (In direct contradiction of other things he says)

4. Tesla/Musk fanatics tip back the Kool-aid and insist all is well in the world.


It's like watching that kid who swears Dad is going to come back from the gas station with that pack of cigarettes he went out for 6 years ago.

 

[Nebroch]

Originally Posted By: HTSS_TR
Tesla and Panasonic are owners of this Gigafactory, Panasonic will invest up to 30-40% of total cost in this factory. Panasonic isn't the sole owner of this factory, and Panasonic will not be the one who run the factory.


Panasonic might not run the factory, but a simple fact is, that not a single cell will be produced without Panasonic, and they don't need any "cooperation" to make them. They have been in battery manufacturing business for decades, of which Tesla or Musk has no idea.

Quote:

http://finance.yahoo.com/news/panasonic-reveals-plans-teslas-gigafactory-112755450.html

Quote:
This $5B factory will manufacture battery cells and packs to use in cars and home. Tesla did secure lithium from some suppliers to make lithium-ion battery cells in this factory.

Tesla Motors Inc (is building a battery factory, called GigaFactory, in Nevada. The $5 billion investment is aimed at reducing battery costs by roughly 30 percent, “partly by bringing in in-house materials suppliers,” a Wall Street Journal article explained.

Early on Friday, the source informed that the automaker has secured long-term supplier agreements with North American companies Bacanora Minerals Ltd, which manufacture lithium, the main raw material used in batteries.

"Main Strategic Differentiator": The analyst assured that GigaFactory is the main strategic differentiator for the company, and this announcement indicates that in the first half of 2016, the facility may start with some limited production of batteries.


http://finance.yahoo.com/news/tesla-secures-lithium-suppliers-gigafactory-175144011.html


In this context "battery production" means, that they assemble cells shipped from Asia to battery modules and battery packs. At some point it was expected that Panasonic would produce cells inside the factory at the end of this year, but we'll see.

Btw. one should do his homework with this "Bacanora Minerals". It's a junior mining company with no production whatsoever. They don't have functioning mines, just few projects in pre-feasibility study phase. Tesla doesn't actually secure anything by making deals with companies like this one, but they can publish a cool press release once again.

http://www.bacanoraminerals.com/

 

[Gasbuggy]

Originally Posted By: HTSS_TR
Originally Posted By: Gasbuggy
I'm hoping we get a President who will pull all their [censored] subsidies. See what happens to their share price after that.

The President can't do much about budget, Congress is the one who distributes subsidies to various industries/companies.

How about state incentives ? Every large company pitting one state against another to get the most incentive. This game had been played for many decades.

Every car company had various incentives from states they open their plants there.

Honda had good kick back from Ohio, same for Toyota, BMW, MB, Hyundai ...

If anyone has any data to show that car company x opened a plant in state y didn't receive any incentive, I like to see one example.


How are you comparing a state incentive for a company creating a significant numbers of good jobs to a average near 10k taxpayer subsidized refund to each wealthy Tesla buyer?

And don't get me started on all the other nonsense, ZEV credit sales.

 

[HTSS_TR]

Originally Posted By: Gasbuggy
How are you comparing a state incentive for a company creating a significant numbers of good jobs to a average near 10k taxpayer subsidized refund to each wealthy Tesla buyer?

And don't get me started on all the other nonsense, ZEV credit sales.

I only compared Tesla $1.3B incentive from Nevada for building the Gigafactory there with other states that gave incentives for large companies building their plants in their states.

Federal tax credit for Plugin Hybrid and Zero Emission Vehicle had been available before Tesla was found. This Federal Tax credit is for any car brand and it doesn't make any different where it is produced.

As I said before, why should US tax payers subsidize foreign car makers who produce these type of vehicles in their homeland and export it to USA ? Why US tax payers subsidize BMW i3, Nissan Leaf, Hyundai EV's ... ?

So you, as US tax payer, are against subsidizing Tesla vehicles that are built their vehicles in America by American workers, but okay with subsidizing foreign car makers such as BMW, Nissan, Hyundai, MB, Audi, VW ... ?

Are ZEV credit available only to Tesla or to any car company that product and sale it in California and 9 other states that mandate the sale of ZEV in their states ? Do you know how ZEV credit works ? Did any state actually pay out any amount to any car company, Tesla included ? The ZEV credit that Tesla received in the last few years was from other companies that did not sell the requirement ZEV or Plug-in Hybrid.

Fair or not, the tax credit and carbon credit and all other credits for ZEV are various Federal and state laws. If you don't agree with buyer of $100+k vehicle get the $7500 Federal tax credit you should write to your congress representative. And demand that tax credit for ZEV should be given to buyers of American vehicles made in America only.

 

[Nebroch]

Originally Posted By: Nebroch

Panasonic might not run the factory, but a simple fact is, that not a single cell will be produced without Panasonic, and they don't need any "cooperation" to make them. They have been in battery manufacturing business for decades, of which Tesla or Musk has no idea.


At least Panasonic is finally using some money for cell production:

http://electrek.co/2016/05/09/tesla-gigafactory-panasonic-q1-2016/

 

[HTSS_TR]

I didn't say "Panasonic needs cooperation by Tesla to make Li-on cells". Panasonic produced Li-on battery cells for many years and Tesla bought it from them to make th packs for their vehicles.

This Gigafactory is built to be sure that they will get enough batteries for half millions vehicles they plan to make by 2020(and now speed up to 2018). Tesla could not run the factory by themselves (financially and lack of expertise) so they need and had Panasonic.

How do they share the profit ? I don't know.

Do you remember you said this "Tesla's PR magic in incredible. When they are one of the largest buyers of these batteries, they make it look like they are the producer."

Tesla is partially own the factory that makes Li-on cells and packs, so they have the right to claim that they produce batteries in that factory.

 

[DoubleWasp]

So by doing business with this All-American company, we are actually just exporting truckloads of money to Japan. Brilliant.

 

[HTSS_TR]

I don't know the details of the deal of Gigafactory between Tesla and Panasonic.

I don't know if Tesla is capable of go by itself in this Gigafactory. Do they have $5B ? do they have knowledge/patents/experience in producing Li-on battery cells ?

When they have to cooperate with Panasonic and Panasonic invests a substantial sum of more than $1B in this project, it tells me Tesla couldn't go alone in this huge project.

At the very minimum, this Gigafactory is in Nevada instead of somewhere in China. This deal is much better than importing billions Li-on battery cells worth billions dollar each year.

 

[KrisZ]

The batteries will most likely be produced in China, in Panasonic factories and imported to Nevada for assembly. Hence the alliance with Panasonic.