Tyler Durden: Amazon, and its “story”, was a piker compared to what Tesla (Wednesday) has done, and keeps on doing.
Because the car company with a market cap of $28 billion, or half that of Ford at $54 billion, just reported “earnings” of $0.02, beating expectations of a $0.00, having delivered some 7,785 cars, just shy of the whisper estimate of 7,892. Actually, scratch that: GAAP EPS was a loss of $0.60 the worst number since Q4 2012, but who needs GAAP in a world in which everyone is desperate to stick their head in the sand. In any event, putting TSLA’s car deliveries in perspective, Ford, with its market cap of $54 billion, sold 188,654 cars in just the month of October, which means TSLA is delivering about 1% what Ford’s business.
But don’t blame the decline on receding consumer demand: it was all a “supply issue”, and Tesla Motors Inc (NASDAQ:TSLA) was quick to note as much in the very first sentence of its investor letter: “Over the past quarter, despite losing almost a month of production due to factory retooling, we delivered the highest number of Model S vehicles ever, with several new records set in North America and worldwide.”
In addition to the slightly weaker, and paltry in the grand scheme of things, Q3 deliveries, Tesla also guided to lower 2014 deliveries:
Production for the full year is expected to be about 35,000 cars, despite entering Q4 with a deficit in production of 2,000 units from Q3.However, the loss of these cars in Q3 means fewer available to deliver in Q4 and our ability to ramp up production in Q4 is constrained by the complexity of launches related to dual motor and autopilot hardware. Consequently, we expect to deliver approximately 33,000 vehicles for 2014. This is 50% above 2013 deliveries, but 5% to 7% below prior estimates for 2014. Previous projections for 2015 are unaffected.
And then this:
To accommodate accelerating Model S demand and prepare for the rapidly growing order book of Model X reservations, we are investing to increase production to more than 2,000 vehicles per week by the end of 2015. We began this process with a production shutdown this summer to transition to our new, higher volume final assembly line and expand our Model S body center. The ramp to our target production rate took longer than expected due to system integration challenges, reducing our production by almost 2,000 vehicles. Being unable to increase production fast enough, not lack of demand, is a fair criticism of Tesla. That said, we expect our annual production will increase by over 50% in 2014, again in 2015 and probably for several years to follow. This is unusual in the car industry.
So the factory retooling… is dragging on? And that’s what is causing the lowered forecast? Whatever will Musk blame the guidance cut in 3 months: even more “ramp up” constraints and an even more complex “autopilot hardware”? But no matter what, end demand is certainly there, and is growing by 50% per year. Supposedly.
And while the Tesla endgame is increasingly apparent to anyone who is not hypnotized by the Musk siren song, here, for everyone else, are three charts that scream that the Amazon “growth story” revulsion is just one determined seller away.
GAAP vs non-GAAP revenue
GAAP vs non-GAAP EPS
Finally, TSLA cash flow: alas, there is no such thing as non-GAAP cash.