2014 Q3 Data Points & Estimates

[gym7rjm]

In the last earnings call I noticed that Adam Jonas and Andrea James were the first two analysts to ask questions. Was this a fluke, or was this Tesla rewarding them for being the two analysts that get Tesla?

Following that point, and maybe this is stretching it a bit... I'm interested to see how Adam Jonas' recent release will influence his treatment in the upcoming earnings call. If he is relegated to the back of the line could that be evidence that Tesla is disappointed in his remarks? Or opposite, if he again is the first in line, could that somehow confirm the conspiracy that he released those remarks with an ulterior motive despite having a good understanding of Tesla and their 2.0 or 3.0 trajectory?

 

[Chickenlittle]

On a somewhat related note has there been any guidance of a drop off on US sales? According to Monthly Plug-In Sales Scorecard Tesla's US sales are about half of the Nissan Leaf and well behind the Volt. I know the company is moving a lot of cars to China and Europe but the estimate of 500 US sales last month is quite a low number.

Not sales, deliveries. Last month factory closed two weeks for upgrade in July means fewer deliveries I august

 

[TSLA_Hopeful]

Dave, is the increase in warranty reserves factored in the income statement you released? I remember Elon saying that was going to have a moderately negative effect on short term earnings.

 

[DaveT]

Dave, is the increase in warranty reserves factored in the income statement you released? I remember Elon saying that was going to have a moderately negative effect on short term earnings.

No, the Q3 estimate from the first post of this thread was made before the new powertrain warranty.

 

[TSLA_Hopeful]

Ah, sorry didn't see that. Great analysis as usual Dave. Just applying your previous analysis, it seems like from an non-GAAP EPS basis this quarter maybe a little tough :/. But hopefully Q4 will be a blowout again.

 

[DaveT]

Q3 earnings release in less than 2 weeks, Nov 5 (Wed).

 

[BlueTan85]

Kind of hoping this topic heats up a bit. Always enjoy the quarterly earnings threads in the final weeks before the call.

Going into the final 10 days... are people still "win some, lose some" in their estimates, or are they growing any more optimistic?

 

[FluxCap]

With Elon's tweet about year-over-year worldwide sales being up 65%, I think we have to reset some expectations for Q3 ER. Anyone agree?

 

[uselesslogin]

With Elon's tweet about year-over-year worldwide sales being up 65%, I think we have to reset some expectations for Q3 ER. Anyone agree?

I don't know, not really. InsideEVs sales numbers agree with the 65% YoY increase in September but still show a 22% YoY decline through September. Furthermore their numbers look reasonable to me. Now it is ridiculously misleading to say the new leasing program is some desperate attempt to increase sales. Yes, these things are meant to increase demand, but they aren't coming out because of poor sales, they are coming out because Tesla can now actually make enough cars to satisfy the demand they will generate. Also, the only reason for the sales "decline" is production constraints and the fact they are continuing their global rollout. I think there is nothing to really refute the bear case until February and/or some pre-announcement in January.

Monthly Plug-In Sales Scorecard

 

[chickensevil]

With Elon's tweet about year-over-year worldwide sales being up 65%, I think we have to reset some expectations for Q3 ER. Anyone agree?

I think it removed some of the downside risk. Basically, I think this gives us what we need for reaffirming that we will meet the delivery numbers. Which I think most everyone here was already on target to think they could hit that. There was a little logistical risk here and I think that has been eliminated making the interview he had with, I think it was, CNBC where he stated that they would meet the delivery guidance (this was like a week before the end of the quarter that he had the interview). But again, I don't think most people thought there was real risk of missing that here so all this does is totally remove that.

The other big risk which was them killing their revenue numbers over the warrenty change to the powertrain (let's not forget that happened in Q3... I know, it was a while ago and easy to forget about) has been IMO eliminated/counterbalanced by the known sell off of the ZEV credits. I think conservative estimates put that value at 35 Million, with the potential to be much more.

So from a delivery perspective and a revenue/EPS perspective I think we will be fine, and we will meet the guidance of 7800 and "slightly positive". I am not expecting a beat here... just happy with a meet.

The real thing that is going to determine everything will be the Production number (REALLY HOPING FOR 9000!) and their Q4/2015 guidance. If there is ANY wavering of the 35,000 delivery number that is going to likely hurt us. I hope this helps!

 

[eepic]

I think it removed some of the downside risk. Basically, I think this gives us what we need for reaffirming that we will meet the delivery numbers. Which I think most everyone here was already on target to think they could hit that. There was a little logistical risk here and I think that has been eliminated making the interview he had with, I think it was, CNBC where he stated that they would meet the delivery guidance (this was like a week before the end of the quarter that he had the interview). But again, I don't think most people thought there was real risk of missing that here so all this does is totally remove that.

The other big risk which was them killing their revenue numbers over the warrenty change to the powertrain (let's not forget that happened in Q3... I know, it was a while ago and easy to forget about) has been IMO eliminated/counterbalanced by the known sell off of the ZEV credits. I think conservative estimates put that value at 35 Million, with the potential to be much more.

So from a delivery perspective and a revenue/EPS perspective I think we will be fine, and we will meet the guidance of 7800 and "slightly positive". I am not expecting a beat here... just happy with a meet.

The real thing that is going to determine everything will be the Production number (REALLY HOPING FOR 9000!) and their Q4/2015 guidance. If there is ANY wavering of the 35,000 delivery number that is going to likely hurt us. I hope this helps!

I believe you're referring to the Fox interviews on Sep 17, here they are:
part 1 Elon Musk on the next step for SpaceX, Nevada gigafactory | On Air Videos | Fox Business
part 2 Elon Musk: Will be able to achieve half a million cars by 2020 | On Air Videos | Fox Business

Personally I agree with your view, and I'm a bit optimistic given Elon's tweet. If he thinks the numbers in general may disappoint he would have let the pessimism be built into the stock price leading up to earnings, but it seems he's confident enough to have none of this WSJ BS. I think it'll be similar to Detroit where Jerome let loose good numbers weeks before earnings, with other big juicy points during earnings itself.

 

[Words of HABIT]

Question? When the big auto manufacturers report their sales numbers, do they count a "sale" as being delivered from manufacturing to one of their dealer's lots, or is the sale only recognized when the car is actually sold to a customer?
I've noticed that for the BMW, Mercedes (along with most other majors) dealers where I live, their car lots are full and their cars are also now piling up at adjacent lots and gas stations. Not very effective IMO.
It kind of reminds me of the article I read many months ago on the number of unsold cars piling up.:frown:
UNSOLD CARS
Although I don't agree with everything written in this article, you can't deny cars from other manufacturers are piling up.

 

[Robertj]

My understanding is the big automakers report when cars sold to dealers. So the many cars sitting on dealers lots are reported as sales.
There is huge pressures at times put on dealers to stuff the pipeline by taking stock which they do not need just so the automaker
can make their quarterly numbers

 

[Johan]

My understanding is the big automakers report when cars sold to dealers. So the many cars sitting on dealers lots are reported as sales.
There is huge pressures at times put on dealers to stuff the pipeline by taking stock which they do not need just so the automaker
can make their quarterly numbers

Very right you are. There is sometimes a lot of fixing and trixing to make the numbers look better for the manufacturers. Sometimes they get hit in later quarter through buy-back or compensation deals with their dealer network but mostly it's the dealers that loose out if the need to sell the cars off at huge rebates.

What happens to new cars that dont sell? - The Globe and Mail

 

[chickensevil]

I believe you're referring to the Fox interviews on Sep 17, here they are:
part 1 Elon Musk on the next step for SpaceX, Nevada gigafactory | On Air Videos | Fox Business
part 2 Elon Musk: Will be able to achieve half a million cars by 2020 | On Air Videos | Fox Business

Personally I agree with your view, and I'm a bit optimistic given Elon's tweet. If he thinks the numbers in general may disappoint he would have let the pessimism be built into the stock price leading up to earnings, but it seems he's confident enough to have none of this WSJ BS. I think it'll be similar to Detroit where Jerome let loose good numbers weeks before earnings, with other big juicy points during earnings itself.

Thanks, those were the interviews I was talking about

 

[RobStark]

The Legacy automakers sell vehicles to dealers. That is when the sale is booked.

They also report "days of inventory", or at current sales pace how long it would take to clear inventory.

This metric is reported for every single car line in trade journal Automotive News.

60 days is normal. Over 100 days they usually will put significant amount of cash on the hood.

Sometimes OEMs push their largest dealers to order more of a certain car to make sales goals sometimes there are kickbacks sometimes there are regional bonuses for salesman that reach certain goals for a particularly line. Salesman one sale short of bonus on the last day of the month "hey, working class family of four what can I do to put you in this sports car TODAY!" Because dealers and salesman are always looking out for the interest of their customers.

 

[chickensevil]

Salesman one sale short of bonus on the last day of the month "hey, working class family of four what can I do to put you in this sports car TODAY!" Because dealers and salesman are always looking out for the interest of their customers.

Boom! You nailed it right there! Hahaha! I like how Tesla does their sales numbers since it is far more accurate

 

[Robert.Boston]

Sometimes OEMs push their largest dealers to order more of a certain car to make sales goals sometimes there are kickbacks sometimes there are regional bonuses for salesman that reach certain goals for a particularly line. Salesman one sale short of bonus on the last day of the month "hey, working class family of four what can I do to put you in this sports car TODAY!" Because dealers and salesman are always looking out for the interest of their customers.

Very funny and sadly true.

OTOH, you walk into a Tesla store, and they'll only talk about one car. And unlike the Model T, you can have it any several shades of black.

 

[RationalOptimist]

Putting together delivery numbers, I'm still a little concerned about a Q3 deliveries miss.
Looks like:
- US will come in 3600 according to Monthly Plug-In Sales Scorecard (consistent with Elon's recent tweet)
- Europe may be a little over 1600
- China is being quoted as 1688 imports... perhaps deliveries are a max of 1600?
- that leaves Hong Kong, Canada and Australia to make up another 1000 to get to 7899. Hard to see that happening.
What am I missing?

 

[mostapasta]

According to the article Maoing posted:
3431-1543 = 1888 (not 1688)

Here's what I have for Q3 based on registration and import data. Red are my estimates and I'm assuming HK isn't included in that China number.

It's still possible for Tesla to meet guidance with their September push in the US. I think the market will be more concerned with if they still hold guidance for the year, but we'll see in a few days.