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They beat loss estimates because they spent $500m [0] on capex instead of $1000m [1]. Not sure if I buy "got better deals from suppliers" story, but it would b
by TrainedMonkey 10y ago
They beat loss estimates because they spent $500m [0] on capex instead of $1000m [1].
Not sure if I buy "got better deals from suppliers" story, but it would be awesome if it was true. Most likely they've hit delays with suppliers.
[0] Q4 2016 update from shareholder letter on http://ir.tesla.com/ http://ir.tesla.com/
[1] http://www.businessinsider.com/tesla-capex-goal-means-1-billion-of-spending-in-q4-2016-10 http://www.businessinsider.com/tesla-capex-goal-means-1-bill...
- refurb 10y agoNot sure if I buy "got better deals from suppliers" story Or they just shifted capex spending so that it doesn't fall on this quarter. I'm not knocking Tesla for doing this, all companies do this (shift costs and revenue around to meet earnings expectations).
- cowsandmilk 10y ago> Or they just shifted capex spending so that it doesn't fall on this quarter. They state pretty clearly that is what happened in the letter. > we continue to negotiate more favorable payment terms with our capital equipment suppliers, pushing some payments closer to the start of Model 3 production and some payments beyond the start of production So, the "deals" are that they don't have to pay for certain things until later when they have more cash.
- taneq 10y agoI don't understand why capital expenditure is viewed as a loss. You spend $1mil on infrastructure, afterwards you have $1mil of infrastructure (which now should start earning you money) instead of $1mil of cash. H ow is that a loss?
- dingo_bat 10y agoBecause profit and loss is measured in cash, not any other kind of asset.
- cowsandmilk 10y ago> How is that a loss? It isn't. If you look at their 8-K, it shows that like 99% of publicly traded companies, cap-ex does not show up on the P&L statement.