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Tesla Motors beats by $0.69, reports revs in-line; reaffirms margin, op-ex guidance; lowers cap-ex; Model 3 and Gigfactory on track
- Reports Q3 (Sep) earnings of $0.71 per share, excluding non-recurring items, $0.69 better than the Capital IQ Consensus of $0.02; GAAP revenues rose 145.3% year/year to $2.3 bln vs the $2.32 bln Capital IQ Consensus -- note rev may not compare due to change to GAAP (estimate may not reflect this).
- Final Q3 delivery count was 24,821,over 300 more than the estimated delivery count we shared on October 2 nd . Deliveries increased 114% from the third quarter of 2015, and was comprised of 16,047 Model S and 8,774 Model X vehicles. In addition, 5,065 vehicles were in transit to customers at the end of the quarter. These vehicles will be delivered in Q4. non-GAAP Automotive gross margin was 25.0% excluding SBC and $139 million of ZEV credit revenue vs. 25-26% implied guidance. Non-GAAP automotive gross margin excluding ZEV credits increased 140 basis points sequentially because of improved manufacturing efficiency and higher production volume.
- Gigafactory construction and Model 3 development both remain on plan to support volume Model 3 production and deliveries in the second half of 2017.
- Meanwhile, our efforts to transform the solar industry will be demonstrated at our joint product introduction with SolarCity on October 28th .
- Reaffirms guidance: "We maintain our guidance of 50,000 new vehicle deliveries for the second half of 2016, with a Q4 plan of just over 25,000 deliveries, despite the challenges of winter weather and the holidayseason. We expect about 30% to 35% of these deliveries to be accounted for as leases for revenue recognition purposes. As previously provided in our second quarter update, we guided a 2 to 3 percentage points improvement in automotive gross mar gin on a GAAP and non-GAAP basis by the end of 2016. Automotive gross margin on a non-GAAP basis excludes ZEV credits and SBC. We are on track to meet this guidance. We also guided in our second quarter update that full year 2016 operating expenses, both on a GAAP and non -GAAP basis, would grow ~30% from 2015. We are also on track to meet this guidance. We now expect our capital expenditures in 2016 will be ~$1.8 billion as we continue to focus on capital efficiency. Capital expenditures for the past three quarters totaled $759 million.
The Tesla third quarter results reflect strong company-wide execution in many areas. Furthermore, we expect this to continue into Q4 and project positive GAAP net income (excluding non-cash stock-based compensation) despite ZEV credit sales in Q4 likely being negligible. We set new records for vehicle production, deliveries and revenue, which led to GAAP profitability and positive free cash flow (cash flows from operations less capital expenditures). At the same time, GAAP total automotive gross margin and gross profit per car increased substantially. Model 3 on plan for volume deliveries in second half of 2017