Cash and cash equivalents take a hit – The Fool Motley

Lower-than-expected first-quarter vehicle deliveries announced earlier this month raised concerns about You're hereof (NASDAQ: TSLA) ability to continue to increase production and reach the end – of – year target for total shipments, an increase of 45% to 65% over the previous year. However, the management of Tesla dismissed these concerns in its first quarter update, reiterating its ambitious forecasts.

Below you will find a detailed analysis of the information that Tesla revealed in its first quarter update, including negative free cash flow, higher participation rate for autopilot options, and management's expectations. profitability topic for the rest of the year.

Tesla first quarter results: gross figures

Data Source: Letter to Shareholders for the first quarter of 2019 from Tesla.

As Tesla revealed earlier this month, vehicle shipments rose 110% from one year to the next. The increase was fueled by the soaring model 3 shipments, which increased from 8182 shipments in the first quarter of 2018 to 50,928 in the first quarter of 2019. However, combined shipments of the S and X models decreased 45% compared to the previous year.

The overall increase in shipments allowed the business turnover to increase by 33% from one year to the next. However, $ 188 million of non-recurring items that negatively impacted Tesla's profitability, reduced S and X model shipments and approximately 11,000 vehicles in transit to customers at the end of the quarter weighed the profitability. The net loss of the company for the period was $ 702 million, or $ 4.10 per share. On a non-GAAP basis, Tesla lost 2.90 USD per share.

What management had to say

In its fourth-quarter letter to shareholders, Tesla said the drop in S and X model deliveries was mainly due to "seasonality, postponement of sales in Q4 2018 in the US, due to the first scheduled reduction of the federal government. " [electric vehicle] first quarter tax credit and interruption of our 75 kWh battery. "

Tesla remains satisfied with model 3 shipments, noting that the vehicle was "once again the best-selling premium car in the US in the first quarter, outpacing the second price by nearly 60 percent."

Strong points

• Free cash flow was negative $ 920 million, a slight improvement over $ 1.05 billion in free cash flow in the prior year quarter.
• Tesla's cash and cash equivalents decreased by $ 1.5 billion sequentially to $ 2.2 billion, primarily due to a $ 920 million bond payment. more vehicles in transit for customers at the end of the quarter.
• The aggressive deployment of autopilot functions by the manufacturer has recently resulted in a higher percentage of customers paying for autopilot options.
• Tesla 's automotive gross margin was 20.2%, down from 24.3% in the same quarter of the previous year.

Look to the front

Thanks to the recently announced improvements to the S and X models and the continued global expansion of its Model 3, Tesla expects "its order rate to continue to increase throughout the year. Year, as our production levels increase. " Management guided 90,000 to 100,000 deliveries in the second quarter and maintained its forecast for 360,000 to 400,000 deliveries during the year, compared to approximately 246,000 in 2018.

Tesla also expects positive cash flow for the remaining three quarters and a return to GAAP profitability in the third quarter. For the second quarter, management turned to another quarterly loss, but said it would be significantly lower than in the first quarter.