Tesla is gearing up to spend $1 billion in the fourth quarter
David Paul Morris/Bloomberg via Getty Images
CEO Elon Musk had earlier this year pleaded with his company to reverse Wall Street skepticism by reporting a profit, and this was its first since early 2013 (and only second ever).
The result comes with an asterisk though, as Tesla changed to GAAP from non-GAAP accounting standards, which messed up many analysts models and caused a lot of confusion about how to assess the automaker's financials.
But it looks like Tesla, as it pushes toward selling a record 80,000 vehicles is finally showing signs on making good on Musk's ambitions.
We are curious about one factor, which is capital expenditure. When Tesla reported second-quarter earnings, it was talking about spending $2.3 billion in 2016. But through September, the carmaker has spent only $759 million.
So capex has been something of a moving target.
A billion is coming
Now, the company says total capex for the year will be$1.8 billion, however, meaning that Tesla plans to spend more than a cool billion in a single quarter. With over $3 billion in cash on the balance sheet, the company will still be operating where it has historically wanted to, with about $1 billion in cash in reserve.
It's also widely expected that Tesla will do another capital raise in 2017, but at the moment the company looks like it will be able to back up Musk's pledge to issue no more stock in 2016.
A billion is still a lot to spend in three months for an automaker than hasn't spend that much in all of 2016. It's certainly possible such an accelerated rate of capex will affect fourth-quarter earnings.
Tesla is holding a conference call for analysts at 5:30 ET, so we'll be listening closely for insight from either Musk or CFO Jason Wheeler on this point.
- A centenarian who starts her day with gentle exercise and loves walks shares 5 longevity tips, including staying single
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- FSSAI in process of collecting pan-India samples of Nestle's Cerelac baby cereals: CEO
- India's e-commerce market set to skyrocket as the country's digital economy surges to USD 1 Trillion by 2030
- Top 5 places to visit near Rishikesh
- Indian economy remains in bright spot: Ministry of Finance
- A surprise visit: Tesla CEO Elon Musk heads to China after deferring India visit
- Unemployment among Indian youth is high, but it is transient: RBI MPC member
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market