NY Post : Tesla temporarily shuts down production of Model 3

Tesla has temporarily suspended its Model 3 assembly line in what the company said on Monday was a planned production pause, as the automaker continues to face challenges ramping up its new sedan.

It was the second time since February that Tesla has temporarily shut down its production line for the Model 3 at its Fremont, Calif., plant.

“These periods are used to improve automation and systematically address bottlenecks in order to increase production rates,” a Tesla representative said.

BuzzFeed, which first reported the news, said workers were expected to use vacation days or stay home without pay during the four- to five-day production pause.

After repeated delays in production of its Model 3 sedan, Tesla is now trying to catch up to a target of building 2,500 vehicles per week by the end of the second quarter. Problems within its heavily roboticized assembly line have complicated those efforts.

On Friday, Musk acknowledged for the first time that he had overrelied on automation in the Model 3 assembly line, a stunning concession from Tesla’s leader who has previously scoffed at competitors’ manufacturing prowess and bragged about creating an “Alien Dreadnought” within the Fremont factory by 2018.

“Yes, excessive automation at Tesla was a mistake,” Musk tweeted on Friday. “To be precise, my mistake. Humans are underrated.”

He also tweeted on Friday that Tesla would be profitable and cash flow positive in the third and fourth quarters, with no need to raise money.

Many analysts dispute this analysis, which hinges on a rapid rise in production of the Model 3 sedan. Delays and lower-than-expected volume have postponed revenue from cars being delivered to customers from reaching Tesla’s bottom line.

Shares did not move after hours after falling 3 percent on Monday, pressured by Musk’s acknowledgement, a report alleging that Tesla undercounted worker injuries — which the company denies — and an amended lawsuit originally filed last year that alleges Musk misled investors about Model 3 production.

In February, Tesla suspended production of its Model 3 for four days in what it said was planned work to adjust equipment in order to improve automation and address bottlenecks. It warned of possibly more periods of downtime in coming months.

Automakers generally do stop or slow production of new models to iron out problems with the production system, although Tesla took shortcuts with the testing of its production line in order to get to market more quickly, shortcuts that some experts say have resulted in early manufacturing problems.

>>> Goldman Sachs beats by $1.38, beats on revs; raises quarterly dividend 6.7%

Goldman Sachs beats by $1.38, beats on revs; raises quarterly dividend 6.7% to $0.80/share
  • Reports Q1 (Mar) earnings of $6.95 per share, $1.38 better than the Capital IQ Consensus of $5.57; revenues rose 25.0% year/year to $10.04 bln vs the $8.73 bln Capital IQ Consensus -- the highest in three years.
  • Annualized ROE of 15.4% was the highest in over five years.
  • Book value per common share increased by 3.2% during the quarter to $186.73; tangible book value per common share was $176.28.
  • Investment Banking net revenues of $1.79 billion (+5%) included the second highest quarterly net revenues in debt underwriting. Institutional Client Services generated net revenues of $4.39 billion (+31%).
  • Fixed Income, Currency and Commodities Client Execution and Equities each produced its highest quarterly results in three years. Net revenues in FICC Client Execution were $2.07 billion, 23% higher than the first quarter of 2017.
  • Net revenues in Equities were $2.31 billion, 38% higher than the first quarter of 2017
  • Investment Management produced record quarterly net revenues of $1.77 billion, as assets under supervision increased to a record $1.50 trillion, with net inflows in long-term assets under supervision of $13 billion.
  • Raised dividend 6.7% to $0.80/share.

>>> Netflix: Color on Quarter --> NFLX +7% near early March all-time highs prema

Netflix: Color on Quarter -->
  • Stifel raises their NFLX tgt to $345 from $325. Netflix posted another quarter of broad-based outperformance, reaching 125mm total subscribers globally. Additionally, 2Q guidance beat Street expectations for net adds by ~ +1mm, as the co expects to have ~131mm subs in the quarter. Netflix modestly raised its outlook for operating margin for the year to 10%-11%, from 10% previously, and reiterated its outlook for negative FCF of $3.0B-$4.0B. They are increasing estimates on strong results / 2Q trends; they however remain Hold rated given current valuation levels
  • Pivotal Research raises tgt to $420 from $400. Overall, NFLX 1Q result continues the strong subscriber trends from the last 6 quarters a trend that is expected to continue for the balance of '18 and importantly NFLX is doing it spending less than anticipated. Post results they raised their raised their '18 net new U.S. sub results from +5.1M to +5.7M and their international subs from +19.3M to +21.7M. They also tweaked their cost forecasts moderately lower and raised their '19 and beyond subscriber forecasts.
  • B. Riley FBR raises tgt to $313 from $243 on margin upside after Netflix topped its global streaming sub guide for 1Q18 by 1M—not the 2M of 4Q17, but still healthy and above the in-line qtr they were anticipating after comparing steady growth in Google search volumes in 1Q18 and 4Q17 to a more robust guide for sub growth in 1Q18. But at a P/E over 100x, its hard to craft a responsible valuation argument for owning this equity. Netflix's success is increasingly looking like a headwind for traditional TV networks.
  • Monness Crespi Hardt raises tgt to $375 from $350. Netflix reported strong 1Q18 results that exceeded Street estimates and our projections. Global streaming net additions came in above expectations and streaming revenue (up 43% YoY) grew at the fastest rate ever, driven by a rapidly growing base of new memberships and a higher ASP. In their view, Netflix is delivering the content to keep customers engaged and willing to pay a 14% higher ASP than year ago. Despite a 60% rise this year, Netflix delivered results that they believe will keep the stock headed in an upward trajectory
  • Needham notes Netflix reported strong 1Q18 financial results. They raise 2Q18E projections to $15.97B of revenue (up 37% y/y), $2.77 of EPS (up 121% y/y) and total paid subs of 125.2mm at 6/30/18 (vs their prior estimate of 124.6mm), based on guidance. NFLX stated that its growth is being driven by global adoption of OTT viewing. They prefer Roku (ROKU) because it trades at half of NFLX's valuation, has better projected FY18E FCF, more global upside, and benefits from new (ie, DIS) OTT channel launches, which threaten NFLX's dominance.
  • Oppenheimer raises their NFLX tgt to $370 from $285
NFLX +7% near early March all-time highs premarket.

>>>> US Gapping down

Gapping down
In reaction to strong earnings/guidance:

  • OMC -1.2%, CMA -0.8%

Other news:

  • LADR -7.2% (Related Fund Management (7.4% active stake) says has determined not to further pursue acquisition discussions with the Issuer at this time and are withdrawing their proposal to acquire the Issuer)
  • APLS -7.1% (files for 5 mln share common stock offering)
  • BLCM -7% (commenced underwritten public offering of 7 mln shares of common stock)
  • ICLR -5.9% (agrees on deal w/ Intel (INTL) to enable ICON to offer the Intel Pharma Analytics Platform for use in clinical trials)
  • TSLA -0.8% (Buzzfeed details that Tesla has halted Model 3 production again)

Analyst comments:

  • CHK -1.6% (downgraded to Sell from Neutral at Citigroup)
  • ACIA -0.5% (downgraded to Neutral from Buy at BofA/Merrill)

>>> US Gapping up

Gapping up
In reaction to disappointing earnings/guidance:

  • NFLX +7%, CE +6.2%, WTFC +2.4%, MLNX +2.1%, UNH +2%, JNJ +0.9%, IHG +0.7%, GS +0.6%

Other news:

  • ROKU +8.4% (ESPN+ direct-to-consumer subscription streaming service now available on Roku devices; Point72 Asset Management disclosed 5.1% passive stake)
  • ARQL +7.4% (enters into license agreement with Basilea Pharmaceutica; Basilea will make an upfront payment to ArQule of $10 mln)
  • IDRA +6.8% (presents data from a study evaluating a combination regimen that involved the TLR-9 agonist tilsotolimod and checkpoint inhibitors targeting two negative immune regulators, IDO-1 and PD-1 to eliminate established tumors in syngeneic tumor models)
  • PUMP +6.3% (to join S&P SmallCap 600)
  • JILL +2.9% (Director disclosed purchase of 100000 shares valued at approx $499.8K)
  • CLVS +2% (prices upsized underwritten public offering of $300 mln aggregate principal amount of its 1.25% convertible senior notes due 2025; additionally prices 1,837,898 shares of its common stock at $54.41 per share)
  • LULU +1.7% (appoints Patrick Guido as Chief Financial Officer, effective April 30, 2018)
  • CRSP +1.6% (presents 'positive' data on allogeneic CRISPR-based CAR-T cell therapies at AACR 2018 )
  • MTSI +1.4% (M/A-COM Tech comments on recent U.S. Department of Commerce export ban)
  • HMNY +1% (continued strength)
  • MNK +1% (repays $300 mln of unsecured, fixed-rate notes maturing April 15, 2018 with cash on hand), .

Analyst comments:

  • IIN +4.6% (initiated with a Buy at Stifel)
  • VIVE +4.2% (initiated with a Buy at Stifel)
  • DBX +2.7% (initiated with a Overweight at JP Morgan)
  • DG +2% (upgraded to Overweight from Neutral at JP Morgan)
  • CCE +1.5% (upgraded to Buy from Neutral at Goldman)
  • ABB +0.7% (upgraded to Neutral from Sell at UBS)

>>> Mellanox Tech beats by $0.13, beats on revs; guides Q2 revs above consensus;

Mellanox Tech beats by $0.13, beats on revs; guides Q2 revs above consensus; raises FY18 revs above consensus (78.35)
  • Reports Q1 (Mar) earnings of $0.98 per share, excluding non-recurring items, $0.13 better than the Capital IQ Consensus of $0.85; revenues rose 33.0% year/year to $251 mln vs the $244.93 mln Capital IQ Consensus. Non-GAAP gross margins of 69.0 percent in the first quarter, compared to 68.5-69.5% guidance and 71.7 percent in the first quarter of 2017.
  • Raised Q1 rev to $240-250 mln from $222-232 mln on Feb 21.
  • Co issues upside guidance for Q2, sees Q2 revs of $255-265 mln vs. $249.57 mln Capital IQ Consensus Estimate; adj. GM 68.5-69.5%.
  • Co issues upside guidance for FY18, raises FY18 revs to $1.03-1.05 bln from $970-990 mln vs. $1.02 bln Capital IQ Consensus Estimate; reaffirms adj. GM 68-69%

>>> US Early premarket gappers

Early premarket gappers

Gapping up:

  • ROKU +7.1%, NFLX +6.4%, PUMP +6.3%, CE +6.2%, HMNY +5%, PGR +4.8%, IIN +4.6%, LULU +3.9%, JILL +2.9%, WTFC +2.4%, NWL +1.7%, CRSP +1.6%, MTSI +1.4%, MNK +1.3%, UNH +1.2%, JNJ +0.8%, FIVE +0.7%, FB +0.6%, BSX +0.6%, KMX +0.5%

Gapping down:

  • BLCM -9.7%, OMC -1.2%, APLS -1.0%

>>> Delachaux Group announces intention to float in Paris by end 2018

Delachaux Group announces intention to float in Paris by end 2018

The Delachaux Group, a global player in mission-critical engineered solutions in technology-intensive strategic markets, announced today that it expects to list on Euronext Paris by the end of 2018 in order to accelerate the Company’s growth and development. Following the transaction, the Delachaux family would remain the majority shareholder in the long term.
Founded in 1902, the Delachaux Group designs and manufactures high value-added products, systems and services critical to the safety, reliability and efficiency of its customers’ equipment and infrastructure. The Delachaux Group mainly serves the rail infrastructure, port, aeronautics, logistics and mining sectors. It has developed an undisputed know-how and renowned innovation capabilities. The Delachaux Group is the world leader in its markets through leading brands, such as Pandrol, Conductix Wampfler and DCX Chrome.
The Delachaux Group’s global and local operating model provides strong support to its clients. Operating in more than 35 countries, the Delachaux Group’s 3000 employees are able to be very responsive at a local level. Its Research and Development centres and market experts offer their clients a global vision and an expertise grounded in the sharing of best practices. This decentralized and collaborative management approach allows the Delachaux Group to have an in-depth knowledge of the value chain, as well as of the commercial, technological and regulatory environment in which the Group operates.
Since 2011, when funds advised by CVC Capital Partners invested in the Company, the Delachaux Group has strengthened its positioning by optimizing its portfolio of brands and activities, stabilising the operational profile of its activities and making its business model even more flexible.
The Delachaux Group’s development is driven by its exposure to end markets which benefit from structural growth trends such as investments in infrastructure, green mobility, energy efficiency and industry 4.0.
The Delachaux Group's growth strategy relies notably on consolidating its position in its key markets, maintaining its investments in innovation and conducting a targeted M&A strategy to strengthen its technological and geographical leadership.
Since 1997, the Delachaux Group has recorded a strong performance and its revenues have multiplied by five reaching €841 million in 2017, with a large recurring share coming from maintenance activities. Adjusted EBIT (current operating income) and adjusted EBIT margin of the Delachaux Group reached €112 million and 13.3% respectively in 2017.
Thanks to this performance and its consolidated position, the Delachaux Group is now contemplating a listing on Euronext Paris. This transaction, which remains subject to market conditions, would enable the Delachaux Group to accelerate its development, strengthen its financial structure and pursue its profitable growth trajectory.
Th full release can be found here.