Tesla Reports First Profit after 12 Quarterly Losses!

[G. David Felt]

G. David Felt
Staff Writer Alternative Energy - www.CheersandGears.com

 

Tesla Reports First Profit after 12 Quarterly Losses!

Surprise, Surprise, Tesla posts a $22 million profit for it's latest quarter. How did Tesla do this?

Wall Street Story

WSJ reports that Tesla reports the following numbers:

Selling pollution tax credits to other auto makers. Gross profit from the credits soared to $139 million from $39 million a year ago.

Revenue is up to $2.3 billion from $936.8 million a year earlier.

Tesla said it generated free cash flow, repaid $600 million in debt and finished September with $3.1 billion in cash, a decline of $162 million from the end of June.  

Tesla also lowered its forecast for capital spending this year to $1.8 billion from $2.25 billion. About $1 billion of that spending could occur in the fourth quarter, it said.

Shares were up 5% to $212.05 in after-hours trading on Wednesday.

WSJ says this has been helped by Tesla's newest Model S version that starts now at $66,000 which contributed greatly to their bottom line as the Q3 was the first full quarter of Entry level Model S sales.

Barclays auto analysts has stated that Tesla will need $2.5 billion through the end of 2017 for the Model 3 rollout and completion of the battery factory.

WSJ Web Page Story

[A Horse With No Name]

I wish them luck.  They may change history in a major sort of way if they can manage their cash flow.

[Drew Dowdell]

Eh, positive, but they're not out of the woods yet. They're only profitable this quarter because they sold a lot more pollution credits.... they still aren't profitable yet from selling consumer products. 

[A Horse With No Name]

11 minutes ago, Drew Dowdell said:

Eh, positive, but they're not out of the woods yet. They're only profitable this quarter because they sold a lot more pollution credits.... they still aren't profitable yet from selling consumer products. 

Someone said that with just the model S,they are profitable, and a lot of the loss is due to trying to bring the X and the 3 online.

I am still not sure I see them surviving long term, sadly.

[G. David Felt]

2 minutes ago, A Horse With No Name said:

Someone said that with just the model S,they are profitable, and a lot of the loss is due to trying to bring the X and the 3 online.

I am still not sure I see them surviving long term, sadly.

I also wonder especially now that they are buying Solarcity. How will all that expense flush out.

[A Horse With No Name]

23 minutes ago, dfelt said:

I also wonder especially now that they are buying Solarcity. How will all that expense flush out.

Not very well.  Methinks this is why Elon Musk keeps talking about Mars....a diversion from the failures in the home office.

[Drew Dowdell]

Solar City is actually doing pretty well I thought.  They're one of the largest solar installers in the US and probably the most well known.

[A Horse With No Name]

8 minutes ago, Drew Dowdell said:

Solar City is actually doing pretty well I thought.  They're one of the largest solar installers in the US and probably the most well known.

Hopefully if costs keep coming down...

[G. David Felt]

31 minutes ago, Drew Dowdell said:

Solar City is actually doing pretty well I thought.  They're one of the largest solar installers in the US and probably the most well known.

I was not to aware of how they are doing, but like the idea of merging to allow Tesla to sell a complete Wall with charging panels as a one stop solution. What I do remember was that his cousin who was running Solarcity was not doing that great of a job I thought.

Either way, I think the merge of Solarcity with Tesla is a win win.

[balthazar]

3 hours ago, Drew Dowdell said:

Eh, positive, but they're not out of the woods yet. They're only profitable this quarter because they sold a lot more pollution credits.... they still aren't profitable yet from selling consumer products. 

Article above says credits sales rose $100M, but revenue went up $1.3B, so it's not primarily from credit sales.

That said, I believe, given Tesla's track record, that this is more 'juggling' rather than a hard turn towards solvency.

Also note that IF the boost is due to the new lowest base price Model S, Tesla just announced the cancellation of the lowest base price Model X.

In the woods, indeed.

[Drew Dowdell]

2 minutes ago, balthazar said:

Article above says credits sales rose $100M, but revenue went up $1.3B, so it's not primarily from credit sales.

That said, I believe, given Tesla's track record, that this is more 'juggling' rather than a hard turn towards solvency.

Also note that IF the boost is due to the new lowest base price Model S, Tesla just announced the cancellation of the lowest base price Model X.

In the woods, indeed.

To me, it was much simpler math.  Profit was $22 million, but credit sales rose $100 million. That means building cars was still losing money for them. (Credit sales are nearly 100% profit.)

I.E. they were profitable due to credit sales. 

[A Horse With No Name]

4 hours ago, Drew Dowdell said:

To me, it was much simpler math.  Profit was $22 million, but credit sales rose $100 million. That means building cars was still losing money for them. (Credit sales are nearly 100% profit.)

I.E. they were profitable due to credit sales. 

And they are still fundamentally burning tons of cash in not terribly rational ways.