Tesla Q2 Fair But Not Spectacular

Seeking Alpha2022-07-21

SummaryQ2 revenues in line while earnings beat on Bitcoin sales.Automotive margins were a little disappointing.Production ramp to continue nicely in back half of the year.After the bell on Wednesday, ...

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Comments

KLF
2022-07-24
KLF
Hmm
- KLF:
  hmm
- KLF:
  hmm
Tomxx
2022-07-21
Tomxx
Like
TeslaLegend
2022-07-21
TeslaLegend
Nice
MFME
2022-07-21
MFME
Really
currylow
2022-07-21
currylow
Ok
MSTAN
2022-07-21
MSTAN
👍👍

Leave a comment

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Research and development costs dropped about $200 million sequentially, which seems a little odd given all the products the company is supposedly working on at the moment. The major difference here was that restructuring and other costs were $400 million less than I figured. The reason here is that Tesla converted most of its Bitcoin to fiat currency during Q2, so there wasn't a massive impairment charge that many were looking for. The Bitcoin sale was a surprise given Elon Musk's past comments about holding the cryptocurrency.Tesla's non-GAAP EPS came in above all three of my cases, mainly driven by the Bitcoin sale and other income items, which can vary wildly from quarter to quarter. Again, I'm not going to make too much of the $2.18 figure beating the $1.80 average street estimate for Q2, given the Bitcoin sale and a variety of other one-time items for the quarter. I'm guessing analysts will call this a \"better than feared\" quarter, but it wasn't exactly a blockbuster that bulls can really rally around.On the cash flow front, Tesla reported free cash flow of $621 million, a bit less than the just under $1 billion the street was looking for. Tesla's cash balance rose to more than $18 billion, helped a bit by the Bitcoin sale. The one item that worried me a bit is that despite the huge drop in production, accrued liabilities and accounts payable rose again. This meant that Tesla's days payable outstanding rose to 80 from 72 in Q1 and 71 at the end of June 2021, so the 80 figure represents the highest value since Tesla started disclosing this metric.Cash flow numbers are certainly helped when you continue to stretch out payments to your suppliers. Critics also might say that the Bitcoin sale was due to Tesla being in a little bit of a cash crunch. 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