Finally a word.
JP, where are you?
I thought I read somewhere way back that Tesla was going to be profitable by the end of 2012. Hmm....
Maybe way back when they were planning to start shipping the Model S in 2011, but certainly nobody's been expecting that for quite a while. Perhaps you're confusing it with cash flow positive?
"Musk told reporters that a quarterly profit was more likely toward the end of 2013, rather than the beginning of the year."
Hard to reconcile, at least for me, the often stated target of 25% gross profit margin with no quarterly profit till the end of 2013. I would have expected that a 25% gross profit margin would translate into an actual profit of 10% of gross sales.
I expect Tesla stock will be down Monday.
Ah...you might be right. cash flow positive is what I heard. Sorry, I'm in healthcare, so I don't know squat about finances. what's the difference?
Cash Flow is money coming in and money going out of the company. If it get a loan, that's money going in that could result in positive cash flow if it doesn't spend more than it borrows. But getting positive cash flow from borrowing is not profit!
Profit is what is left after you pay up all your debts, salaries, supplies, expenses...
Some investors gauge the health of a company by Cash Flow rather than Profit.
As long as there's cash liquidity, cash flows in and out with no profit even for a decade (such as Amazon.com that suffered loss year after year after year for more than a decade),that is still much better than a company that is profitable, has no debt but has a cash liquidity crunch.
Thus, again for many investors, it is not profit, but "Cash Flow is King"
Another way to look at it: Throughout 2011 and 2012 Tesla spent heavily on capital equipment getting manufacturing line ready. That is one reason they burned through cash. But those big capital expenses are behind them now, and it sounds like tesla is actually putting cash into the bank now. Ie they are cash break even or better now that they are selling cars quickly. However all that capital expense including all the r&d get amortized over many many years and is charged against profit on their official earnings. So that is why they won't be profitable for a while yet.
Hmmm. Shoulda paid attention in Econ 101. Wait, I never took Econ. Just science course.
I do not like the amount of silience from Tesla. They should be more pro-active in their communication platform for us that have order a car (X or S).
Elon Musk has with his comment to Reuters now confirmed that what have already been suspected that the Tesla X want be ready for production before 2nd half of 2014.
It looks like I must wait until 2015 before I can get the "huge grin" on my face, and impress the kids.
...the Tesla X won't be ready...