January 22, 2019 TomTom, the Dutch navigation and digital maps company, said on Tuesday it has agreed to sell its Telematics, or the fleet management business, to Japan’s Bridgestone for 910 million euros (£802.5 million or $1.03 billion). The company will return 750 million euros of that to shareholders via a capital repayment and share… Continue reading TomTom to sell Telematics unit to Japan’s Bridgestone for $1.03b
Tag: Financial Results
Tech Mahindra to Fuel Digital Growth in Bangladesh
Tech Mahindra to Fuel Digital Growth in Bangladesh
Company plans to scale up operations in the country to deliver next generation technology solutions and service offerings across sectors
Dhaka, New Delhi – January 21, 2019: Tech Mahindra, a leading provider of digital transformation, consulting and business re-engineering services, which already has a considerable presence in the Bangladesh IT industry, will fuel digital growth in Bangladesh across government and private sectors. Tech Mahindra plans to address the growing business opportunities that have come up with the booming IT market in the country through its innovative next generation technology solutions and service offerings.
Tech Mahindra currently offers a diverse range of professional services to clients in the Telecom and BFSI (Banking, Financial Services and Insurance) space in Bangladesh and is also running large scale operations in the financial inclusion space. As part of its expansion strategy, Tech Mahindra aims to focus on generating new revenue streams through digital transformation projects in both Government as well as private sector across various industries with focus on ICT (Information and Communications Technology) & government business.
Sujit Baksi, President, Corporate Affairs, Tech Mahindra, said, “Driven by strong domestic demand and macroeconomic stability, Bangladesh has emerged as one of the most buoyant economies of the SAARC region. Adding fuel to that fire, is the rapidly growing communication landscape that has thrived with increased Internet connectivity, smart mobility and rise of digital media. We at Tech Mahindra, are bullish on the strong growth potential of this market and hope to leverage our digital expertise in pushing forward the “Digital Bangladesh mandate.”
“Creating jobs, boosting investments, diversifying exports and building human capital will be the key focus areas for the Bangladesh economy to sustain itself in the coming years. We look forward to collaborate with the country in its pursuit of a 'Developed Bangladesh' agenda and we hope to forge formidable partnerships with local businesses in the region to nurture and utilize local talent pool to make the most of this opportunity,” he further added.
With a sustained GDP (Gross Domestic Product) growth rate of more than 7%, rising per capita income and improved social indicators, Bangladesh has become one of Asia's most remarkable success stories in recent years. With over 9% increase in GDP growth rate forecasted in the next five years, Bangladesh's dynamic and growing economy, booming IT market and strategic location next to India, China and the ASEAN markets, provides the perfect opportunity for Tech Mahindra to expand its operations in the country, as well as generate revenues from the SAARC region.
As part of the TechMNxt charter, Tech Mahindra aims to leverage its global expertise in the use of cutting-edge digital technologies such as Blockchain, 5G – Telecom of the Future, Artificial Intelligence, Automation, Robotics, and Internet of Things to develop solutions that cater to the rapid evolving needs of the consumers in Bangladesh.
Tech Mahindra already has a sizable presence in Bangladesh along with its subsidiary, Mahindra Comviva, which has an extensive portfolio spanning mobile finance, content, infotainment, messaging and mobile data solutions. As part of the USD 21 billion Mahindra Group – a major player in the Bangladesh market across various sectors since the past 20 years – Tech Mahindra aims to leverage the footprints of its parent organization to scale up its operations in the country.
About Tech Mahindra
Tech Mahindra represents the connected world, offering innovative and customer-centric information technology experiences, enabling Enterprises, Associates and the Society to Rise™. We are a USD 4.9 billion company with 118,390+ professionals across 90 countries, helping over 930 global customers including Fortune 500 companies. Our convergent, digital, design experiences, innovation platforms and reusable assets connect across a number of technologies to deliver tangible business value and experiences to our stakeholders. Tech Mahindra is the highest ranked Non-U.S. company in the Forbes Global Digital 100 list (2018) and in the Forbes Fab 50 companies in Asia (2018).
We are part of the USD 21 billion Mahindra Group that employs more than 200,000 people in over 100 countries. The Group operates in the key industries that drive economic growth, enjoying a leadership position in tractors, utility vehicles, after-market, information technology and vacation ownership.
Connect with us on www.techmahindra.com || Our Social Media Channels
Facebook
Twitter
Linkedin
Youtube
For more information on Tech Mahindra, please contact:
Tuhina Pandey,
Global Corporate Communications
Agency contact if any
Email: media.relations@techmahindra.com;
Tuhina.Pandey@TechMahindra.com
Tesla will need to make cheaper Model 3s by the second half of 2019
James Glover II | Reuters
Elon Musk
Tesla needs to get cracking on a cheaper car.
The electric vehicle maker said Friday it plans to cut about 7 percent of its workforce, which by the last company headcount would equal about 3,100 jobs. The plan is to cut costs and get closer to making the $35,000 Model 3 the company has been promising since it first unveiled the car in 2016.
Right now the cheapest Model 3 available is the midrange rear-wheel-drive model, which starts at $44,000. A long-range all-wheel-drive model starts at $51,000, and the performance model starts at $63,000.
The sales boost from the $7,500 U.S. federal tax credit is running out, and that stands to hurt demand in the United States.
One of the primary reasons for the job cuts is the fact that the cars Tesla makes are still “too expensive for most people,” CEO Elon Musk said in an email to employees announcing the reductions.
For now, Tesla has Europe to lean on, Wedbush analyst Dan Ives told CNBC. The company began allowing European reservation holders to configure their Model 3 orders in early December and plans to begin delivering some versions to the region by next month.
Tesla was not available for comment.
“If you think about the trajectory, the first half of 2019 is really Europe coming onboard,” said Wedbush analyst Dan Ives. That strength in demand will likely offset relative weakness in demand in the U.S., in large part to the waning tax credit and Tesla's relatively high prices. “But then ultimately in the second half you need the mid-range Model 3 to really start to kick in.”
Toward the end of 2018, Tesla finally seemed to have pulled itself out of the “production hell” it had been submersed in since it began Model 3 production in the summer of 2017.
With the company clearing Musk's stated goal of producing 5,000 Model 3s per week, Tesla began focusing on reducing costs and improving efficiency. Tesla's third-quarter results were surprisingly strong, making good on Musk's expectation that Tesla would be profitable and cash flow positive from the second half of 2018 onward.
There is still debate on Wall Street over whether Tesla will need to raise capital in the next 12-18 months, Ives said, adding that he thinks there is about a 30 to 35 percent chance the company will need to return to markets for cash. Tesla does have about $1.5 billion in debt due in 2019 — one tranche due in March and another in September.
Read more: Here's what every major Tesla analyst had to say about the cuts.
WATCH: How taxpayers have boosted Elon Musk and Tesla
How taxpayers have boosted Elon Musk and Tesla
10:06 AM ET Mon, 22 Oct 2018 | 07:43
Tesla has $920 million in debt that’s coming due — and it could wipe out a large chunk of its cash
Tesla shares fall after layoff announcement — Five analysts on what's next
2:47 PM ET Fri, 18 Jan 2019 | 06:39
Tesla has a billion dollar debt coming due, and it could wipe out nearly a third of the company's cash if the stock price doesn't improve.
About $920 million in convertible senior notes expires on March 1 at a conversion price of $359.87 per share. But Tesla's stock hasn't traded above $359 for weeks. If the shares are about $359.87, then Tesla's debt converts into Tesla shares. If not, Tesla will have to pay the debt in cash.
Tesla reported cash and cash equivalents of $3 billion at the end of its September quarter. The company continues to reveal pressure to maintain profitability, and announced Friday it would cut 7 percent of its full-time workforce.
Shares fell more than 10 percent Friday following the announcement to trade around $310 per share.
Musk said during the company's third quarter earnings call that Tesla plans to honor the original maturation date.
“The current operating plan is to pay off our debts and not to refinance them but to pay them off and reduce the debt load and overall leverage of the company,” Musk said at the time.
Tesla had previously notified bondholders they could be paid out in a 50-50 mix of cash and common stock, according to Bloomberg. But if the stock doesn't recover above $359 — a gain of 16 percent from Friday's intraday price — by the conversion date, Tesla won't have a choice.
Correction: Tesla reported cash and cash equivalents of $3 billion at the end of its September quarter.
WATCH: Tesla is laying off workers. Here's what investors need to know.
Tesla is laying off workers. Here's what investors need to know.
8:44 AM ET Fri, 18 Jan 2019 | 05:26
Subscribe to CNBC on YouTube.
Kia launches global CSR program, ‘Green Light Project’ in India
Kia Motors has started its first ‘Green Light Project’ corporate social responsibility program in India with a two-week volunteer program in Anantapur District, in the state of Andhra Pradesh. In partnership with the regional government, Kia is undertaking a series of projects to support vocational training and education at three educational institutions in the local… Continue reading Kia launches global CSR program, ‘Green Light Project’ in India
Development Alliance: The BMW-Daimler-Plan for autonomous driving
iNext from BMW More than 1,000 engineers are developing the new vehicle on a campus north of Munich. (Photo: BMW Group / Enes Kucevic) MunichThe rivalry between Daimler and BMW is considered legendary. Decades of competition ultimately made both brands global global market leaders for luxury sedans. But soon competition could be slowed down, at… Continue reading Development Alliance: The BMW-Daimler-Plan for autonomous driving
Tesla Q4 Financial Estimates — Tesla Will See Profits, Just Not As Much
Electric Cars
Electric Car Benefits
Electric Car Sales
Solar Energy Rocks
RSS
Advertise
Privacy Policy
Cars
Published on January 19th, 2019 |
by Vijay Govindan
Tesla Q4 Financial Estimates — Tesla Will See Profits, Just Not As Much
Twitter
LinkedIn
Facebook
January 19th, 2019 by Vijay Govindan
Happy Holidays, Happy Kwanzaa, Happy Festivus, and Happy New Year!
I received quite a few comments that running Tesla’s finances through a lemonade stand confused readers. I realized two things. People without a financial background loved it. People who fully read Tesla’s SEC filings for a mid-morning snack hated it, or at best tolerated it. 😉
To make some amends, I am publishing two spreadsheets used to make my predictions for Tesla’s Q4. The first is my original and the second is after adjusting for Tesla’s recent delivery estimates for Q4 (see here and here for some high-level detail on Q4 deliveries). Sorry, lemonade folks. I promise I’ll bring lemonade back when Q4 results are released.
Update: Tesla’s news on 1/18/2019 shocked me and forced an update to my original article. I was predicting a record-breaking quarter. That turned out to not to be the case and it would be wrong to go with what I first wrote. I have kept my original charts and most of the wording to show my thought process. I have included additional sections below to account for the news.
I wrote this on my Twitter feed: “Heart-wrenching news to those impacted @Tesla. ;( My prayers are with you and your family. You will get something soon. Thank you for your dedication and contributions to advancing sustainable energy for all of us. God speed.”
Tesla’s Profit-Setting Q4
Tesla set records for production and deliveries in the 4th quarter. From Tesla’s delivery report:
“Q4 deliveries grew to 90,700 vehicles, which was 8% more than our prior all-time-high in Q3. This included 63,150 Model 3 (13% growth over Q3), 13,500 Model S, and 14,050 Model X vehicles.”
After difficulties suffering through production hell earlier in the year, this is an extraordinary feat. That said, Wall Street analysts and I had even greater expectations. According to FactSet, delivery numbers were 2,000 less than expected. Without detailed access to the FactSet database, we don’t know how FactSet computed the numbers. I am reaching out to FactSet in the hopes of finding out more. A miss of 2,000 deliveries amounts to a miss by 2.1%. It’s not a lot. In combination with Tesla reducing prices, this is blamed for Tesla’s stock having a deep fall early in January. “The Grinch is in town and Santa has left the building,” was the general feeling among Tesla shareholders (of which I’m one).
I will have to eat humble pie based on how wrong my estimates were. I was overly optimistic that the combination of the expiring tax credit and buoyant production would allow Tesla to set even larger records. It looks like Tesla did not expand production aggressively and focused on preserving gross margin. However, that bodes well for the financial results in February.
Here are some highlights:
Metric
Old Q4 Estimate
New Q4 Estimate
Revenue
7,672,682
7,289,697
Cost of Revenue
5,770,693
5,494,546
Operating Expenses
1,088,305
1,088,305
Net Profit / Loss
606,449
506,166
Diluted Earnings Per Share
3.40
2.84
Cash and Cash Equivalents
3,823,542
3,723,259
Cash Flow from Operating Activities
1,417,003
1,316,720
Cash Flow from Operating Activities Minus Cash Flow from Investing Activities
856,038
755,755
Gross Profit
24.1%
23.9%
Deliveries
96,721
90,700
The end result of my estimates is still $500 million in net profit. Operating cash flow is strong at $1.3 billion. Cash balance increases robustly to $3.7 billion. This cash balance does not include the $230 million in debt Tesla repaid in November. Adjusted earnings are estimated at $3.99, still much higher than Wall Street estimates or Estimize’s crowdsourced estimates.
Here are some charts for those visually inclined.
Tesla’s Layoffs
Elon’s email should be read in full by anyone interested in Tesla.
“In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3. This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit.”
This news changes everything in the charts above. It also led to a -13.0% drop in the stock. How much “less” is less GAAP Profit? I decided to do a quick scenario analysis.
Q4 Net Profit / Loss – Possible values under different Gross Margin / Model 3 ASP scenarios
Model 3 ASP
Gross Margin
52,500
55,000
57,500
17.20%
203,062
228,550
254,039
19.70%
280,861
310,054
339,247
22.20%
358,660
391,558
424,455
24.70%
436,459
473,061
509,664
Q3’s Net Profit was $311,516. Cells in black underline are possible based on what Elon said. These numbers are based on $205 million in ZEV credits, which is probably overstated. The best case is Gross Margin stayed the same as last quarter and Model 3 ASP declined to 55,000. The worst case scenario is profit much less than Q3. Combined with an expected tiny profit in Q1, expectations were reset for many people. It could be profit is less due to the other areas outside of the Model 3 not performing well. I think it is more sales of the Mid-range Model 3 which helped lower ASP’s. Lower ZEV credits also would contribute to less profit. Most likely, it is a combination of items. We won’t know for a few weeks what caused the lower profit. It’s merely speculation at this point.
Tesla Pravduh
Tesla delivery and financial numbers are never complete without some Pravduh thrown in to get the naysayers energized.
CNBC: “Tesla shares tumble as much as 10% as company misses Wall Street vehicle delivery estimates, cuts prices”
The headline is accurate but misleading. How many people will put the proper emphasis on “as much” in the above headline? The 10% tumble is emphasized. That’s bad optics and a large round number. Actual closing results were -6.8%. This level of volatility is high but normal for Tesla over the last year. The headline makes it seem Tesla is cutting prices due to missing vehicle delivery estimates. That’s factually not true. From Tesla’s delivery estimate press release:
“Moving beyond the success of Q4, we are taking steps to partially absorb the reduction of the federal EV tax credit (which, as of January 1st, dropped from $7,500 to $3,750). Starting today, we are reducing the price of Model S, Model X, and Model 3 vehicles in the U.S. by $2,000.”
If we re-write the above, it looks like the following: Tesla shares drop -6.8% as the company just misses optimistic Wall Street vehicle delivery estimates, cuts prices to offset tax credit. If things were really bad, Tesla would have cut prices by $3,750 or more. The egregious part of this headline is that it was prominently featured on CNBC’s home page the whole day even as Tesla bounced higher from the lows of the day. It was subsequently moved from the home page after the markets closed. That’s real-time Pravduh for you. Sneaky, highly effective, and the evidence destroyed. And that’s just one headline. There were many others like that.
Conclusion
Although Tesla didn’t meet my overly optimistic estimates, they still had a profitable quarter. Even if gross margins are the same as last quarter, they will still earn a decent level of profit. Hats off to all the employees of Tesla for making it happen. Longer term, Tesla will continue to grow.
Cyclically, the US stock markets are in a weak time right now until March. Tesla will go along for the ride. Apple came out on Jan 2nd and said revenue for Q1 would be $5 billion to $8 billion less than what it thought two months ago! China is the culprit for not buying enough golden delicious Apple iPhones. For Apple’s honesty in reporting material news, the stock went down 7% after the market closed. Please keep in mind Tesla is reporting record deliveries and went down a similar amount. Investors are panicking after seeing the stock market closed lower at year-end for the first time in 9 years. All subpar news will be sold quickly and viciously as investors head to the warm caress of cold, hard cash and soft, 24 karat gold.
Note: I wrote the last paragraph before the news on Tesla came out. There is a rising risk of worldwide recession heading into January 2020, which I did not mention previously. 2019 is shaping up to be challenging on many fronts for Tesla. But there is room for optimism on Tesla’s product pipeline. Elon ended his email on a positive note.
“For those remaining, although there are many challenges ahead, I believe we have the most exciting product roadmap of any consumer product company in the world. Full self-driving, Model Y, Semi, Truck and Roadster on the vehicle side and Powerwall/pack and Solar Roof on the energy side are only the start.”
Regarding Q1 estimates, I have no comment. Q1 is seasonally weak for Tesla. Tesla will be facing market turbulence and a Chinese economy slowing down. This will occur even as Tesla starts Model 3 exports to China and Europe to fulfill their backlogs. It is very possible that Tesla has record Q1 production with severely delayed revenue. This can happen due to longer transit times to China and Europe. All of this makes an estimate useless at this time.
You can view the full initial estimates here or the updated spreadsheet with actual delivery results here.
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
I am currently long Tesla shares and short Tesla stock options as a short-term hedge. I do not plan to make any investment or divestment related to Tesla in the next 48 hours from the publish date of this article. I do use the proceeds from my hedge to buy more Tesla shares.
About the Author
Vijay Govindan Vijay ..
Mercedes manufacturer: pressure on Daimler in diesel affair increases
Daimler In total, there are five national judgments against the Swabian vehicle manufacturer, but they are not yet legally binding. (Photo: AP) Munich, Düsseldorf When Anja Hillmer bought her Mercedes-C class two years ago, she had no idea what was wrong. Although the diesel scandal at that time for some time headlines, but that was… Continue reading Mercedes manufacturer: pressure on Daimler in diesel affair increases
Elon Musk SEC Lawsuit Stems From Misleading Tweets To Take Tesla Private
SEC sues Tesla CEO Elon Musk for securities fraud.
The Securities and Exchange Commission has filed a lawsuit against Tesla CEO Elon Musk for a series of posts on Twitter where he suggested taking his company private at a stock price of $420 per share.
Court documents filed on Thursday show that SEC charged Musk for securities fraud due to misleading tweets. According to CNBC, sources close to the company also expect Tesla to be sued albeit the company was not named as defendant in the complaint.
The complaint alleges that Musk issued false and misleading statements that funding was secured for a Tesla buyout.
The statements were posted on Twitter in August. Less than three weeks after the controversial tweet, Tesla announced it will remain pubic.
“Musk’s statements, disseminated via Twitter, falsely indicated that, should he so choose, it was virtually certain that he could take Tesla private at a purchase price that reflected a substantial premium over Tesla stock’s then-current share price,” the filing from the Southern District of New York reads.
SEC said that Musk’s tweets caused significant disruption, and now seeks civil penalties sans noting an amount. It also wants to bar the billionaire from serving as an officer or director of any public company.
“Corporate officers hold positions of trust in our markets and have important responsibilities to shareholders,” Steven Peikin, co-Director of the SEC’s Enforcement Division, said in a press release.
During a press conference held on Thursday evening regarding the complaint, Stephanie Avakian, co-director of the SEC’s division of enforcement, enumerated the responsibilities that Musk should have as chairman and CEO of a public company.
“Those responsibilities include the need to be scrupulous and careful about the truth and accuracy of statements made to the investing public,” Avakian said.
In response to the SEC complaint, Musk said that the allegations are unjustified. He also said that he has always taken actions in the best interest of investors, truth and transparency. Amid issues of making misleading statements, Musk said that he never compromised his integrity.
In a statement released on Thursday evening, Tesla and the company’s board showed support to their CEO. The statement attributes Elon’s integrity and leadership for transforming Tesla into the most successful auto company in the United States in over a century.
Tesla shares dropped more than 13 percent in extended trading on Thursday following news of the lawsuit. The stock is around 30 percent below its 52-week high of $387.46.
Tesla hikes Supercharger prices worldwide to reflect changing costs
Justin Chin/Bloomberg via Getty Images Tesla’s efforts to improve its bottom line go beyond layoffs and disappearing perks. Electrek has learned that Tesla is raising Supercharger rates around the world, with per kWh rates climbing about 33 percent in numerous markets. While it’s still less expensive than gas (even the 36 cents per kWh in… Continue reading Tesla hikes Supercharger prices worldwide to reflect changing costs