Wednesday, 23 May, 2018

Investors will eye cash, production in Tesla 1Q earnings

Spencer Platt  Getty Images Spencer Platt Getty Images
Lindsey Cook | 03 May, 2018, 15:59

With much of its future riding on the success of its Model 3 sedan, Tesla said Wednesday it is still on track to produce 5,000 such cars a week by the end of June.

To achieve profitability, Musk will have to reverse what today amounts to a $22,584 pre-tax loss per vehicle built by the Silicon Valley company. During the same quarter in the prior year, the company posted ($1.33) EPS. Vetr cut shares of Tesla from a "buy" rating to a "hold" rating and set a $331.97 target price on the stock.in a research report on Tuesday, January 9th.

"These questions are so dry".

"We now expect to reach a module production rate of 5,000 vehicle sets per week even before we install the new automated line designed and built by Tesla in Germany", the company said.

"And so where specifically will you be in terms of capital requirements?"

Beyond 2018, though, it's not hard to imagine Tesla at least exploring a lease option for the Model 3. However, that Model 3, with a shorter battery range, isn't expected to be on sale until next year, and most Model 3 cars now cost closer to $50,000. Through the vast majority of Model 3 production, including in body welding, general assembly, inverter and drive unit production, our automation effort has been very successful.

The company said it will reduce capital spending for 2018 from $3.4 billion to $3 billion.

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Tesla did not break out a cash flow calculation as it has in previous quarters.

Investing.com analyst Clement Thibault said the reduction was noteworthy, "but in the long run given challenges that lay ahead of Tesla, I don't think it is going to make or break the company". Is that indefinite? At what point does Tesla's board either invite him back or replace him? The company burned through more than $1 billion for the third time in four quarters.

The giant loss in a critical quarter for the 15-year-old company was bigger than Wall Street expected. Truewealth LLC purchased a new position in Tesla in the fourth quarter valued at $102,000.

Several analysts have claimed that Tesla will need to raise billions of dollars more this year, although Elon Musk has disputed this, claiming that because it expects to be cashflow-positive by the end of the third quarter, there is "obv [sic] no need to raise money".

Now only about 2,000 of the cars are being produced each week, with more than 500,000 people having made paid reservations for the affordable mass-market electric vehicle. In March, the group estimated that Tesla delivered 3,820. The division could be posting over half a billion in revenue per quarter by the end of this year.

Tesla posted a record $709.6m net loss in the first quarter and burned through $745.3m in cash while struggling to crank out large numbers of its Model 3 mass-market electric auto. The company reported having a revenue of $3.41 billion and adjusted stock losses at $3.35 per share.

Shares in Tesla are down more than 6% from a day high in after-hours trading after maverick boss Elon Musk described an analyst as a "boring bonehead" for a question about its record loss.

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